Treasury yields rose last week after the government reported that inflation accelerated last month, reinforcing expectations that the Federal Reserve will keep raising interest rates for a while.
Fed Chairman Alan Greenspan told Congress the economy is expanding at a "reasonably good pace." And Fed Board member Donald L. Kohn said in a speech that most forecasters "expect growth to remain solid," despite the recent flare-up in energy prices. But investors were shaken by news that the consumer price index jumped in March at the fastest rate since October. Kohn sounded guardedly optimistic, saying inflation "should moderate later this year" -- if energy prices stabilize.
Tomorrow, Treasury will sell $16 billion in three-month bills and $14 billion in six-month bills, which yielded 2.92 percent and 3.16 percent, respectively, in when-issued trading Friday. Also tomorrow, Treasury will announce details of an auction of four-week bills to be held Tuesday.
On Tuesday, there will be a sale of $9 billion in inflation-indexed five-year notes.
-- Nell Henderson