Treasuries Fall After Fed's Dudley Downplays Meaning of Pause

Treasury yields rose led by the five-year after New York Federal Reserve President William Dudley downplayed the length of any pause in short-term rate normalization by the central bank when it starts to shrink its balance sheet.

Yields were higher by two to seven basis points at 4 p.m. in New York, with the 10-year higher by 4 basis points at 2.38 percent. Dudley said his March 31 comments that caused bonds to rally and steepened the curve were “misconstrued” by some. Earlier in the session, yields fell to session lows after nonfarm payrolls increased less than forecast in the March jobs report, then immediately rebounded as focus shifted to the unexpected drop in the U.S. unemployment rate unexpectedly to the lowest level since 2007. The 10-year yield’s 11-basis-point daily range was the biggest since Dec. 14.