Treasuries Climb after Leading Indicators Fall

The weaker report fueled arguments that the Fed could be nearing the end of its monetary tightening policy

MARKETSCOPE : Treasury bond prices were climbing Monday after news that leading economic indicators fell.

The 10-year Treasury notes were yielding 4.65% near closing time, from 4.67% at Friday's close. The 30 year bonds yielded 4.69% from 4.71%. Yields fall when prices rise.

The U.S. Index of Leading Economic Indicators fell 0.2% in February from 0.5% in January, which was revised down from 1.1%. This broke a string of four consecutive months of solid gains following the hurricanes last Fall. The news added fuel to the argument that the Fed might be getting close to ending its monetary tightening cycle, as economic growth slows.

Boston Fed President Minehan said this year will be one of "solid growth" but she sees real estate as a "source of downside risk." She said she expects gradual flattening in home prices and a modest decline in construction activity. She sees baseline core inflation at about 2.0% and believes labor costs could pressure inflation.

Fed Chairman Ben Bernanke soon discusses "Reflections on the Yields Curve and Monetary Policy" before the New York Economic Club. San Francisco Fed President Yellen talks on CRA prior to Bernanke's talk.