i Develop Stocks Advisory

U.S. Treasuries Gain as Traders Increase Bets for Fed Rate Cuts Treasuries rose, pushing two-year yields to the lowest in 4 1/2 years, on speculation rising unemployment and widening credit-market losses will prompt the Federal Reserve to cut interest rates by as much as 100 basis points this month. Traders see a 32 percent chance the Fed will lower its target rate for overnight lending between banks to 2 percent by its March 18 meeting, according to interest-rate futures. Stocks fell and the cost of insuring corporate bonds against default soared. The yield difference between two- and 10-year notes was 1 basis point short of the widest in almost four years on concern the rate reductions will stoke inflation. Two-year yields fell 11 basis points to 1.42 percent as of 6:50 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of the 2 percent note due February 2010 rose 7/32, or $2.19 per $1,000 face amount, to 101 1/8. A basis point is 0.01 percentage point. The yield touched 1.404 percent, the lowest level since July 2003. It has slipped 18 basis points this week, while 10-year yields were little changed on the week at 3.50 percent.