Treasuries Fall Second Day as Sales Data Fuel Bets Fed to Taper
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Treasuries dropped the most in more than a week as U.S. retail sales increased for a fourth month, adding to speculation the economy is strengthening enough for the Federal Reserve to reduce its bond-buying program.
The yield gap between Treasury five- and 10-year notes widened to almost the most in two years after the Commerce Department said retail sales rose 0.2 percent in July. Fed Bank of Atlanta President Dennis Lockhart, who has backed the $85 billion in monthly purchases, said policy makers may start to slow buying at any of their next three gatherings amid “uneven performance” by the economy. They next meet Sept. 17-18.