Treasuries were weaker in late morning action Wednesday, as Federal Reserve Chairman Alan Greenspan said the outlook for the U.S. economy during the next few months remains difficult to forecast, because the recovery following the Sept. 11 terrorist attacks hasn't been consistent.
Greenspan, speaking on Capitol Hill, said fiscal policy can't by itself remove the risk of recession from the economy. The chairman did say he had seen tentative signs the economy was beginning to rebound in August, before the terrorist attacks.
Around 11:30 a.m. EDT, the two-year note was losing 2/32 to 99 31/32, yielding 2.76%. The five-year was off 3/32 to 103 16/32, yielding 3.78%. The 10-year Treasury was down 6/32 to 103 9/32, with a yield of 4.58%, and the 30-year bond was lower by 2/32 at 100 14/32, yielding 5.34%.
Also weighing on government bonds was a report showing that housing starts in September unexpectedly rose. Still, the number of building permits dropped, indicating that a slowdown in housing starts might occur in the coming months.