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Treasury 10-to-30-Year Curve Narrowest Since 2010 on Fed Outlook

The difference between yields on 10- and 30-year U.S. Treasuries narrowed to the least since 2010 after the Federal Reserve indicated interest rates may rise faster than anticipated while the pace of growth is moderate.

The U.S. sold $13 billion of 10-year Treasury Inflation Protected Securities at lower-than-average demand as the difference between yields on 10-year notes and similar maturity TIPS narrowed to the least in a month. Two-year notes extended yesterday’s drop, the most since 2011, as Fed Chair Janet Yellen suggested interest rates may rise by the middle of next year. Benchmark 10-year notes erased this week almost all of last week’s gains, the most since January, amid turmoil in Crimea.