New York: Treasury two-year notes fell for the first time this month after a government report showed the US economy grew at the fastest pace in six years and the Federal Reserve upgraded its outlook on the recovery.
Yields on the securities, more sensitive to changes in expectations for a monetary policy instead of longer-maturity debt, increased as Kansas City Fed President Thomas Hoenig dissented from the central bank's decision to keep interest rates at a record low for an "extended" period on January 27.
A Labor Department report on February 5 is forecast to show that US job losses slowed to 13,000 positions in January.
"We are obviously coming out of a hole," William Larkin, a fixed-income portfolio manager in Salem, Massachusetts, at Cabot Money Management, which manages $500 million (Dh1,839 million) said.
Clear signs
"There are clear signs the extreme event has ended. From here we need to see it sustained. I would expect that one dissent to grow over time outside of any economic hiccups."
The yield on the two-year note rose two basis points to 0.81 per cent on the week and is down 32 basis points in January, according to BGCantor Market Data.
The yield climbed as much as 12 basis points on January 27, the largest one-day increase since December 31.
The 10-year note yield fell two basis points this week to 3.58 per cent. For January, the yield has dropped 25 basis points, the biggest monthly decline since March.
