US treasuries gain on expectations that Fed may keep measured pace

March 22 | Updated: Mar 23 2005, 05:50am hrs
The US 10-year treasury notes rose on expectations that the Federal Reserve on Tuesday will reiterate a plan to raise interest rates at a measured pace.

Policy makers will boost the target rate for overnight loans between banks to 2.75% from 2.50%, the seventh quarter percentage point rise since June, according to 98 of 105 economists surveyed by Bloomberg News.

Ten-year note prices are higher since the Fed began using the phrase in May.

The Fed is going to have a similar message as before, said Ken Fan, an interest-rate strategist at ABN Amro Bank in New York, one of the 22 primary dealers of US government securities that trade with the Fed.

If the Fed raises concern on inflation, youre certainly going to have a little bit of a problem for the treasury market at the long end, or longer- maturity debt, he said.