Treasuries Drop as Economic Data Add to Fed-Tapering Speculation

Treasury 10-year yields rose, touching the biggest monthly gain since December 2010, as an increase in consumer confidence bolstered speculation the Federal Reserve may trim its bond-buying program with the economy strengthening.

Treasuries pared losses after bankers advising the Fed said “it is likely that current policy accommodation will continue for one to three years,” according to minutes of the central bank’s May 17 meeting released today in Washington. Pacific Investment Management Co.’s Bill Gross, the manager of the world’s biggest bond fund, said he likes five- to 10-year Treasuries and there will be “no tapering for now.”