Short-Maturity Treasury Yields Decline as Fed Debate Simmers

Short-maturity Treasuries posted small gains as investors looked to a swath of delayed US economic reports ahead this week that have the potential to alter expectations for further Federal Reserve interest-rates cuts next year.

Yields for two- and three-year notes declined by at least a basis point, remaining inside this month’s ranges. The two-year rate, which slid nearly eight basis points to 3.54% on Dec. 10 when the Fed cut interest rates by a quarter point as expected, was around 3.51% after paring a larger decline. Interest-rate strategists at JPMorgan Chase & Co. last week recommended buying two-year notes at yields around 3.60%, seeing scope for a decline to below 3.40%, at least.