Treasury Prices Give Up Earlier Gains

Investors continued watching U.S. interest rates and bond yields

MARKETSCOPE : Treasury bond prices fell on Tuesday, erasing early gains as investors watched U.S. interest rates and the global economy.

The benchmark 10-year note eased 02/32 to 97-04/32 for a yield of 4.78%, while the 30-year bond dropped 09/32 to 93-18/32 for a yield of 4.91%.

The front end of the yield curve - T-bills and two-year notes - rose slightly, showing the recent steepening of the curve persisting. This has alleviated concerns over the possibility of economic recession, and also mitigated stock market jitters over the elevated level of yields at the long end.

Federal Reserve officials are making presentations Tuesday. Kansas City President Hoenig, for example, speaks tonight on the economic outlook.

Pundits continue debating about what will happen to the Federal Funds rate, which currently stands at 4.75% after a series of hikes in recent years. The 30 year bonds were already trading close to 5% yield, and fell 04/32 early Tuesday to 93-22/32 for yield of 4.903%.