Treasuries rose, pushing yields to a one-week low, as initial jobless claims climbed
and income growth slowed, bolstering concern that the economy is losing momentum.
Investors also bought debt before a government report tomorrow that may show the
economy shed jobs for a fourth straight month. Traders added to bets today that the
Federal Reserve will lower interest rates for an eighth time since September, after
yesterday's quarter-point cut to 2 percent. The price of the 2 1/8 percent security due
in April 2010 rose 1/32, or 31 cents per $1,000 face amount, to 99 25/32. The 10-year
note yield fell 3 basis points to 3.70 percent. Jobless claims rose to 380,000 in the
past week from 345,000 the previous week, government data showed. Growth in
personal incomes slowed to 0.3 percent in March after a 0.5 percent increase the prior
month, the government said. Traders see a 28 percent chance the Fed will lower its
benchmark rate to 1.75 percent at its next scheduled meeting on June 25, futures on
the Chicago Board of Trade show. The rest of the bets are for the Fed to keep the rate
unchanged at 2 percent. The market is .125 to .25 better in discount this morning.
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