Treasury Bonds Drop Before Fed Announcement, Snap Three-Day Gain

Treasury 30-year bonds fell for the first time in four days on speculation investors who bet the Federal Reserve would buy longer-maturity debt to boost the economy are poised to exit those trades for a profit.

Ten-year yields climbed from within seven basis points of a record low before the Fed releases its policy statement at the end of a two-day meeting today. The central bank is likely to say it will buy longer-term debt to spur investment in riskier assets in a move dubbed Operation Twist, said Pacific Investment Management Co.’s Tony Crescenzi. Treasuries fell 0.7 percent in November 2010 after the Fed last expanded its asset-purchase program, Bank of America Merrill Lynch Indexes show,