Treasuries Gain as 7-Year Auction Draws Record Low Yield

Treasuries gained for the first time in three days as the Federal Reserve’s pledge to keep borrowing rates low through 2014 pushed the yield to a record low at today’s auction of $29 billion in seven-year notes.

The 10-year note yield fell toward the lowest level in two months as higher-than-forecast weekly jobless claims added to speculation the Fed is far from pulling back on monetary stimulus. Fed Chairman Ben S. Bernanke said yesterday he is prepared to do more if needed. Yields fell earlier on concern the European debt crisis may widen.