* U.S. December CPI keeps door open for monetary
* Fed's Beige Book shows moderate U.S. economic growth
* Bond recede from session highs as stocks pare losses
NEW YORK, Jan 16 U.S. Treasury debt prices rose
on Wednesday, prompted by bets the Federal Reserve will stick to
its bond purchase program, which aims to cut unemployment, as
long as inflation remains muted.
Benchmark yields fell for a fourth straight session on
safe-haven bids linked to anxiety about a protracted fight in
Washington over raising the $16.4 trillion federal borrowing
limit, analysts said.
"It's the continued buying from the Fed which is bringing
good support to the market," said Jason Rogan, director of
Treasuries trading at Guggenheim Partners in New York.
The Fed on Wednesday bought $1.474 billion in federal debt
maturing from February 2036 through November 2042, which was a
part of its $45 billion monthly purchases of Treasuries.
While some investors have questioned the effectiveness of
this third round of quantitative easing, dubbed QE3, many top
Fed officials including Chairman Ben Bernanke have stated their
support of it in recent days because the economy has not been
expanding fast enough to bring down unemployment.
Moreover, the modest pace of business activity could easily
be wiped out by fiscal disruption due to the political tension
in Washington, analysts said.
The Fed's latest Beige Book, a collection of anecodotes on
regional economic conditions, showed mild growth across the
United States in recent weeks but it signaled no impetus that
economic expansion will accelerate.
With this moderate growth, U.S. consumer prices barely grew
in December. Analysts reckoned this climate allows the Fed room
to keep buying bonds to hold down long-term borrowing costs and
leave short-term policy rates near zero.
Benchmark 10-year notes rose 3/32 in price at
98-7/32 with their yields at 1.823 percent, down from 1.836
percent late on Tuesday.
Thirty-year bond prices increased 6/32 to
94-25/32, yielding 3.015 percent, down from 3.206 percent late
Bond prices retreated from their earlier highs as Wall
Street stocks pared their initial losses on strength in the bank
and technology sectors.