NEW YORK: Prices of benchmark US Treasuries traded near flat on Thursday, with yields in sight of 3 percent for the first time in two years after minutes of a recent Federal Reserve meeting revealed few clues about when the central bank might exit its bond-buying program.
But the minutes, released on Wednesday, also did little to dispel expectations that the pullback in the so-called quantitative easing program would happen soon.
"The 10-year at 2.90 (percent) is a barometer of both expectations for economic growth and this clear concern that we're in territory that we don't know how to operate," said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee.
A few Federal Reserve officials thought last month it would soon be time to slow the pace of Fed bond buying "somewhat." But others counseled patience, according to the minutes of the late July meeting.
The 10-year benchmark note slipped 5/32 in price on Thursday, bringing its yield to 2.9103 percent from 2.892 percent late on Wednesday.
The 30-year bond rose 6/32 in price to yield 3.910 percent, down from a yield of 3.921 percent late on Wednesday.
Yields have jumped more than 100 basis points since May as investors have increasingly seen the Fed soon pausing its $85 billion per month in purchases of Treasuries and mortgage-backed securities.
A Reuters poll showed last Wednesday that a majority of economists expect the Fed to reduce bond purchases at its Sept. 17-18 policy meeting, with a consensus expecting it to reduce purchases by $15 billion initially.
The potential pullback shines a spotlight on the next nonfarm payrolls report, due Sept. 6, for the month of August.
Fed policymakers want to see the unemployment rate nearer to 6.5 percent from its current 7.4 percent.
That report is "going to be ultra important. It's going to be the last one before they meet in September," said Jacob Oubina, senior US economist with RBC Capital Markets in New York.
Fed policymakers next meet Sept. 17-18.
"I don't think they need to see a blowout (jobs) report. Something in and around the 200,000 zone" would be enough, Oubina said.
Data on Thursday showed that the number of Americans filing new claims for unemployment benefits rose last week but held close to a six-year low and gave a positive signal for hiring during the month.
"We are looking at moderate job growth. We are looking at 180,000 for August," said Gus Faucher, senior economist at PNC Financial Services in Pittsburgh.
"We are concerned about job quality and wages. They will rise when the jobs market continues to improve," he said.
As part of its ongoing stimulus program, the Fed bought $1.496 billion in bonds due from February 2036 to February 2043 on Thursday.
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