Treasuries Rise as Fed’s Dudley Says Bond Buys May Be Prolonged

Treasuries rose for a second day as Federal Reserve Bank of New York President William C. Dudley said the central bank may prolong its asset-purchase program if the economy’s performance fails to meet the Fed’s forecasts.

Bonds pared gains after the National Association of Realtors’ index of pending U.S. home sales jumped 6.7 percent to 112.3, the highest since December 2006. Treasuries maintained gains earlier after U.S. consumer spending rebounded and claims for jobless benefits fell. Pacific Investment Management Co.’s Bill Gross said 10-year yields may fall a quarter-percentage point. The U.S. will sell $29 billion of seven-year securities.