Treasuries Decline as Fed Seen Mainttaining Stimulus

Treasury 10-year notes fell, with yields touching the highest level in nine months, on speculation the Federal Reserve will emphasize the need for continued monetary stimulus at the conclusion of today’s policy meeting.

Government bonds briefly pared losses after a report showed the U.S. economy unexpectedly contracted in the fourth quarter. Gross domestic product was restrained by the biggest plunge in defense spending in four decades and dwindling inventories as household purchases picked up, the Commerce Department said. The U.S. will auction $29 billion of seven-year securities, the last of $99 billion of note sales this week.