Treasuries were stronger after yet another economic report indicated the U.S. economy is mired in a slowdown, adding to the likelihood that the
Federal Reserve will cut the fed funds target rate for the 10th time this year when the central bank's policymaking arm meets Tuesday.
Monday morning, the National Association of Purchasing Management's nonmanufacturing index came in weaker than expected and dropped to an all-time low, providing more evidence that the economy is in a recession.
Around 11:30 a.m. EST, the two-year note was up 2/32 to 100 18/32, yielding 2.45%. The five-year gained 2/32 to 104 9/32 to yield 3.59%. The 10-year added 5/32 to 105 7/32, yielding 4.34%, and the 30-year bond, which is being discontinued, climbed 22/32 to 107 5/32 to yield 4.91%.
Federal Open Market Committee is expected to cut overnight lending rates by 50 basis points to 2%. A quarter-point reduction is the minimum that economists expect. The rate, at 2.5%, is already at the lowest level since the Kennedy administration.