Treasuries Close Higher As Traders Continue To React To Fed

(RTTNews) - After moving higher over the course of the previous session, treasuries saw some further upside during the trading day on Thursday.

Bond prices moved notably higher in morning trading but gave back some ground in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.6 basis points to 1.632 percent.

The strength among treasuries came as traders continued to react to the Federal Reserve's monetary policy announcement Wednesday afternoon.

While the Fed left interest rates unchanged as expected, the central bank signaled that a rate hike is likely before the end of the year.

The statement from the Fed said the case for an increase in the federal funds rate has strengthened but that most members decided to wait for additional data for "the time being."

Reflecting division within the committee, Kansas City Fed President Esther George, Cleveland Fed President Loretta Mester and Boston Fed President Eric Rosengren voted to raise rates by a quarter point.

The Fed is widely expected to leave rates unchanged at the November meeting due to the subsequent president election, but many analysts are targeting the December meeting for a rate hike.

On the U.S. economic front, the National Association of Realtors released a report this morning showing an unexpected decrease in existing home sales in the month of August.

The report said existing home sales slid 0.9 percent to an annual rate of 5.33 million in August after tumbling by 3.4 percent to a downwardly revised 5.38 million in July.

A separate report from the Conference Board showed that its index of leading economic indicators edged down by 0.2 percent in August compared to expectations for a 0.1 percent uptick.

A lack of major U.S. economic data may lead to light trading activity on Friday, although investors are likely to keep an eye on remarks by some Fed officials.