Yields steady as investors wait on Fed speakers

NEW YORK: US Treasuries yields held near more than one-week highs as investors waited on a quartet of Federal Reserve speakers due to speak on Friday for any signs over whether they will seek to downplay comments on Wednesday by Fed Chair Janet Yellen that the Fed may raise interest rates sooner than many expected.

Yellen, speaking at a press conference on Wednesday after the Fed's two-day policy meeting, said the Fed could raise rates six months after its current bond-buying program ends, which spurred selling on fears of an earlier-than-expected move away from the bank's near-zero rate policy.

Fed officials due to speak on Friday include St. Louis Fed President James Bullard, Dallas Fed President Richard Fisher, Minneapolis Fed President Narayana Kocherlakota and Fed Governor Jeremy Stein.

"There are some views out there that one or more of the Fed speakers are going to try to downplay the six-month comment from Yellen," said Jason Rogan, managing director in Treasuries trading at Guggenheim Partners in York.

Yellen's comments on Wednesday sent yields spiraling upwards, with two-year notes among the worst performers as investors see the notes as likely not offering enough returns for the scenario that the Fed could raise interest rates in mid-2015.

Two-year notes were last yielding 0.45 percent, little changed from Thursday but up from around 0.34 percent before Yellen's comments. Benchmark 10-year notes were last unchanged in price to yield 2.78 percent, up from around 2.68 percent before Yellen spoke.

Kocherlakota, the lone dissenter to the Fed's policy decision this week, said in remarks released on Friday that the Fed should have promised to keep rates near zero until US unemployment falls below 5.5 percent, as long as inflation and financial stability risks are contained,

By dropping the Fed's pledge to keep rates low until the jobless rate reaches a more healthy level, the US central bank is sending the wrong message on both inflation and jobs, he said.

The Fed will buy between $1 billion and $1.25 billion in bonds due from 2036 to 2044 on Friday as part of its ongoing purchases.