Yields on the benchmark securities approached a two-year high as minutes showed Fed officials supported chairman Ben Bernanke’s plan to start reducing stimulus under quantitative easing later this year if the economy improves, with a few saying it might be needed soon. The yields rose earlier as an industry report showed sales of previously owned U.S. homes climbed in July to the fastest pace in almost four years.
“It does appear the markets are continuing to expect tapering,” said James Camp, managing director of fixed income in St. Petersburg, Fla., at Eagle Asset Management Inc., which oversees $27.8 billion. “The Fed wants out of QE. In the near term we see a 3% handle.”
The Treasury 10-year yield increased six basis points, or 0.06 percentage point, to 2.87% at 2:24 p.m. on Wednesday in New York, according to Bloomberg Bond Trader prices. It climbed on Aug. 19 to 2.90%, the highest since July 2011.