Reply #13: U.S. 10-Year Notes Fall for 3rd Day, Longest Slump Since March

[UpInArms]

http://www.bloomberg.com/apps/news?pid=10000103&sid=aOW...

June 10 (Bloomberg) -- U.S. 10-year Treasuries fell for a third day, their longest slump since March, amid speculation yields near their lowest in 14 months don't reflect prospects for U.S. economic growth.

Federal Reserve Chairman Alan Greenspan said yesterday the economy is on a ``firm footing'' and policy makers may keep the ``measured'' stance of raising rates. Economists have lifted their forecasts for U.S. growth, a Bloomberg monthly survey shows, helping diminish demand for government bonds.

``The market is getting a little more excited about rate hikes,'' said Sarah Luetgert, a fixed-income strategist at WestLB AG in Frankfurt. ``People were cautious ahead of Greenspan as they were worried he might say something a little dovish and he didn't, so we've seen bonds drop.''

The benchmark 4 1/8 percent note due May 2015 fell 1/8, or $1.25 per $1,000 face amount, to 101 9/32 at 7:40 a.m. in New York, according to Cantor Fitzgerald LP. The yield rose 2 basis points, or 0.02 percentage point, to 3.97 percent. Luetgert forecasts the 10-year yield at 4.7 percent by year-end.

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``Greenspan caused some people to temper some of their bullish views on Treasuries,'' said Steve Mansell, an interest- rate strategist at Banc of America Securities in London. ``The Fed is going to keep hiking rates at a measured pace which means at least another two more rate increases.''

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