Treasuries Rise as CPI Report Quiets Any Inflation Worries

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Treasuries were mostly higher after a report showed inflation probably isn't going to be a factor in the near term, leaving room for the Federal Reserve to again cut interest rates before the end of the year.

In a report Friday morning, the Labor Department said consumer prices, excluding food and energy, rose 0.2% in September, the same as the previous month.

Treasuries reacted to the expectation that companies will lower prices in order to attract consumers, who have been reluctant to spend following the Sept. 11 terrorist attacks.

Around 11 a.m. EDT, the two-year note was up 2/32 to 100 2/32, yielding 2.71%. The five-year was also up 2/32 to 103 18/32, yielding 3.76%. The 10-year Treasury gained 4/32 to 103 14/32, yielding 4.56%, but the 30-year bond lost 2/32 to 100 25/32, to yield 5.32%.