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TREASURIES-U.S. yields seen in tight range, traders eye Fed meeting

·2 min read

(Updates prices) NEW YORK, Sept 15 (Reuters) - U.S. government bond yields ticked higher on Wednesday, in a bounce back as the 10-year yield touched a fresh three-week low following economic data that showed further evidence that inflation had probably peaked. Import prices declined for the first time in 10 months in August, though persistent bottlenecks in the supply chain could, however, keep inflation high. Federal Reserve Chair Jerome Powell has maintained that high inflation is transitory. With no top tier economic data coming in the rest of the week, traders are looking forward to next week's Fed meeting as it prepares to reduce its trove of bond holdings. Economic data is starting to underpin the idea that high inflation is transitory according to Jason Pride, chief investment officer for private wealth at Glenmede. "It seems like the market storyline is coming around to the Fed's storyline, which I believe is stabilizing the range of where interest rates are priced," Pride said. The yield on 10-year Treasury notes was up 2.3 basis points to 1.302% after earlier touching a three-week low of 1.26%. The yield on the 30-year Treasury bond was up 1.3 basis points to 1.865%. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 108.8 basis points. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 0.4 basis points at 0.213%. The U.S. Treasury yield curve measuring the gap between yields on 5- and 30-year Treasury notes was at 106.4 basis points, after earlier touching 103.9 bps, the flattest in 13 months. September 15 Wednesday 3:29PM New York / 1929 GMT Price Current Net Yield % Change (bps) Three-month bills 0.04 0.0406 0.000 Six-month bills 0.0475 0.0482 -0.003 Two-year note 99-212/256 0.2131 0.004 Three-year note 99-208/256 0.438 0.008 Five-year note 99-194/256 0.7999 0.019 Seven-year note 100-54/256 1.0934 0.023 10-year note 99-132/256 1.3022 0.023 20-year bond 99-36/256 1.8015 0.020 30-year bond 103-20/256 1.8652 0.013 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 10.50 0.50 spread U.S. 3-year dollar swap 11.50 0.00 spread U.S. 5-year dollar swap 10.00 0.00 spread U.S. 10-year dollar swap 3.25 0.75 spread U.S. 30-year dollar swap -24.00 1.00 spread (Reporting by Rodrigo Campos Editing by Marguerita Choy)