August 19, 2013 / 3:52 PM / in 4 years

TREASURIES-Yields rise before minutes of Fed meeting released

* Fed minutes due on Wednesday, could show QE debate
    * Yields on 10-year Treasuries hit a series of new highs
    * Ben Bernanke not attending Fed's Jackson Hole conference

    By Luciana Lopez
    NEW YORK, Aug 19 (Reuters) - Yields on U.S. Treasuries rose
on Monday, extending last week's gains as investors anticipated
upcoming minutes from the Federal Reserve's July meeting, which
could strengthen the view that the central bank could soon taper
its bond-buying program.
    Benchmark yields touched the latest in a series of two-year
highs, with little in the way of economic data to distract
markets from the Fed minutes due on Wednesday.
    Speculation that the Fed could soon hit the brakes on its
$85 billion per month buying of Treasuries and mortgage-backed
securities has sent yields soaring in recent months - over 100
basis points since May, with about 20 basis points in the past
two weeks alone.
    The minutes will be "one of the few opportunities to get any
type of insight into where the policy is leaning ahead of the
potential taper announcement," said Ian Lyngen, senior
government bond strategist at CRT Capital Group LLC in Stamford,
    Half the economists in a Reuters poll expect the Fed to
begin reducing its asset purchases in September, according to a
Reuters poll. 
    The annual policy conference held each year by the Fed in
Jackson Hole, Wyoming, will be on Thursday and Friday.
    "The Jackson Hole conference later this week, while
typically a big market focus, is unlikely to give us anything
insightful as far as the thinking of the leaders of the Fed,"
Lyngen added.
    Fed Chairman Ben Bernanke will not be attending in contrast
to previous years. His absence comes as investors await news on
who will be the next chairman of the U.S. central bank. Fed Vice
Chairman Janet Yellen and former Treasury Secretary Lawrence
Summers are considered the front-runners.
    Benchmark 10-year Treasury notes fell 9/32 in
price on Monday to yield 2.858 percent compared with 2.825
percent on Friday. 
    The 30-year bond fell 12/32 in price to yield
3.868 percent compared with 3.847 percent on Friday.   
    Some analysts noted that the Fed minutes could do little to
soothe jittery markets, saying they were likely to underscore
the divergent views within the Federal Open Market Committee.
    "With minutes from the previous June FOMC meeting revealing
that nearly half of FOMC participants wanted to discontinue the
QE purchase program by year-end, we could see the likely healthy
debate on QE tapering create additional market uncertainty,"
Gennadiy Goldberg, U.S. strategist at TD Securities in New York,
wrote to clients.

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