Treasuries Rise as Services Output Decline Shows Uneven Recovery

Treasuries rose as an unexpected drop in a nonmanufacturing index last month showed an uneven economic recovery and fueled speculation the Federal Reserve will keep its interest-rate target at record lows.

Benchmark yields dropped from the highest level since July 2011 as the above-3-percent level attracted demand. Janet Yellen is poised for confirmation by the Senate today as head of the central bank, which begins reducing its bond-buying program this month and will release minutes of its December policy-makers meeting on Jan. 8. The U.S. will sell $64 billion of Treasuries maturing in three, 10 and 30 years this week.