Treasuries Gain as Reid Says Talks May Not Meet Deadline

Treasuries rose for a second day as investors sought safety after Senate Majority Leader Harry Reid said the budget stalemate that threatens to push the economy into recession probably won’t be resolved by year-end.

U.S. government bonds pared gains as House Majority Leader Eric Cantor said his chamber of Congress will convene Dec. 30 on the eve of the deadline. Treasuries reached highs of the day after Reid said on the Senate floor “nothing’s happening” on talks to avert $600 billion in tax boosts and spending cuts set to start in January. He said Republicans wouldn’t cooperate.