Treasury 5-Year Notes Lead Gains as Summers Drops From Fed Race

Treasury notes rose on speculation the withdrawal of Lawrence Summers’s candidacy to become the next Federal Reserve chairman may mean the central bank will be less aggressive in slowing monetary stimulus.

Five-year notes led gains on speculation Vice Chairman Janet Yellen would likely hold short-term rates lower for longer if she succeeds Ben S. Bernanke in January. Yields fell as much as 14 basis points before price gains were more than cut in half. The yield on the 30-year bond rose, after touching a more than one-week low, with Federal Open Market Committee members forecast to announce a tapering of the central bank’s bond-buying program at a two-day policy meeting that begins tomorrow.