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Treasuries Rally as Traders Reduce Fed Rate Wagers

Treasuries rallied, with 10-year note yields falling the most since July, as investors pared wagers for early interest-rate increases after the Federal Reserve unexpectedly refrained from reducing debt purchases.

Yields on the benchmark 10-year security posted the biggest one-day decline in almost two years on Sept. 18, after Fed Chairman Ben S. Bernanke said policy makers would await more evidence of sustained growth before tapering bond purchases being used to damp borrowing costs. The Treasury will sell $97 billion in two-, five- and seven-year notes next week.