December 4, 2012 / 4:25 PM / in 5 years

TREASURIES-Longer-dated prices add gains after Fed buy

NEW YORK, Dec 4 (Reuters) - Prices on longer-dated U.S. government debt added to earlier gains on Tuesday, hitting session highs, after the Federal Reserve’s $1.84 billion bond purchase, its latest move for its “Operation Twist.”

Primary dealers submitted a smaller-than-usual $4.047 billion in bonds for the U.S. central bank to buy. The Fed’s subsequent $1.837 billion purchase of Treasuries due in Feb. 2036 to Nov. 2042 caused dealers to scramble for longer-dated issues on the open market so they can resell them to the Fed, a head Treasuries trader said.

The 30-year bond last traded up 11/32 in price with a yield of 2.779 percent, down 2 basis points from late on Monday. It was up as much as 14/32 in price with a 2.775 percent yield.

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