US Treasuries left flat after mixed GDP report
Wed Mar 30, 2005 08:48 AM ET
NEW YORK, March 30 (Reuters) - Treasury debt prices hesitated either side of flat on Wednesday after revisions to last quarter's GDP data failed to show an expected gain in growth but did show an uptick in inflation.
The government reported gross domestic product grew by a 3.8 percent annualized rate in the fourth quarter, unchanged from the second estimate but below forecasts of 4.0 percent. Still, business investment was revised up and inventories down, a mix that was promising for growth this quarter.
However, the price indices in the report were generally revised higher, a blow to a bond market that has become increasingly concerned about inflation risks.
The core personal consumption expenditures price index was now reported at an annual 1.7 percent rate up from the initial 1.6 percent, and this was the favored inflation measure of the Federal Reserve.
The benchmark 10-year note (US10YT=RR: Quote, Profile, Research) dipped 2/32, lifting yields to 4.59 percent from 4.58 percent. Yields on the two-year note (US2YT=RR: Quote, Profile, Research) ticked up to 3.85 percent from 3.84 percent late Tuesday.