Treasuries Rise as Emerging-Market Losses Fuel Growth Doubts

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Treasuries advanced as a selloff in emerging markets stoked demand for government debt amid concern that global growth is slowing.

Longer-term Treasuries led gains as investors await minutes from the Federal Reserve’s latest meeting for clues to the timing of a potential interest-rate boost. Minutes from the July gathering are set for release at 2 p.m. New York time. Oil tumbled to a six-year low, while equities fell.

“Global equities have been getting hammered,” said Tom Tucci, managing director and head of Treasury trading in New York at CIBC World Markets Corp. The Fed is trying to raise U.S. rates amid global uncertainty, he said.

Benchmark U.S. 10-year note yields fell about two basis points, or 0.02 percentage point, to 2.17 percent as of 11:31 a.m. New York time, according to Bloomberg Bond Trader data. The 2 percent security due in August 2025 rose about 1/4, or $2.50 per $1,000 face amount, to 98 17/32.

The yield on the 30-year bond fell about three basis points to 2.83 percent.

Treasuries fell earlier even as a Labor Department report showed the consumer price index climbed 0.1 percent after a 0.3 percent gain the month before, a Labor Department report showed Wednesday. The median forecast of economists surveyed by Bloomberg projected a 0.2 percent increase.

At their meeting last month, Fed policy makers said they’d be ready to raise interest rates when there had been “some further improvement in the labor market” and when they are “reasonably confident” inflation is moving toward 2 percent.

Futures show traders see about a 48 percent probability the Fed will raise its benchmark rate at its Sept. 16-17 meeting, based on the assumption that the effective fed funds rate will average 0.375 percent after the first increase. It has kept its key rate in a range of zero to 0.25 percent since December 2008.

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