Fixed income

Bessent spoke a week after Democrats won several key elections by zeroing in concerns over the cost of living, including housing, groceries, utilities and health care. Trump himself has rebuffed such concerns.

Investors have turned to private readings such as the Challenger, Gray & Christmas Inc. report showing companies announced the most job cuts for any October in over 20 years.

Longer-dated notes led the decline, which was initially triggered by ADP Research data showing employment at US companies increased by more than forecast in October.

With debt offices slashing sales of longer-maturity debt, the recent drop in 30-year bond yields is likely to run further.

Yields on 10-year notes rose two basis points to 3.99% after falling the previous two sessions, while monetary policy-sensitive two-year notes held steady around 3.49% Wednesday morning.

Yields on 10-year benchmark US government bonds rose as much as four basis points to 4.04%, the highest in more than a week, after negotiators from the world's two biggest economies said they'd struck a series of agreements on issues.

The consumer price index for September — delayed by the federal government shutdown — showed core prices rose 0.2% on a monthly basis, less than the 0.3% expected.

Traders are shifting their focus to Friday's release of the consumer price index, the first real glimpse on the state of the economy since the start of the US government shutdown.

Dollar bonds, meanwhile, reversed an earlier jump. Notes maturing in 2035 were down by almost 0.1 cent on the dollar, trading at 57 cents.

The department has been increasing the supply of bills — Treasury securities that mature in a year or less — in a way that means the federal government needs to carry a larger checking-account balance.

Treasuries have rallied since the flare-up in trade talks prompted renewed demand for U.S. government debt as a haven.

After an apparent truce, the US and China are back to making tit-for-tat trade swipes. Market participants are fretting more about the potential impact on growth than how the protectionist measures will affect inflation.

While the shutdown has delayed the release of federally-compiled statistics, economists at Citigroup Inc. and Goldman Sachs Group said state-level data suggested initial jobless claims increased last week.

Over the past two years, volume in the $30 trillion US government bond market was about 58% higher than average on the last trading day of the month, the New York Fed found.

The government closure that began on Oct. 1 has delayed the release of official data that traders rely on to assess growth and inflation and gauge the Fed's next steps, after it eased last month for the first time this year.

Moves in Japanese government bonds have foreshadowed that of their global counterparts this year, with a spike in super-long yields in the Asian nation amplifying ructions fueled by fears of widening fiscal deficits.

CLOs offer an alternative to investment-grade and junk corporate bond markets, which are trading at very thin premiums to Treasuries. They bundle leveraged loans into bonds of varying risk and reward, allowing managers to tailor portfolios to specific investors tolerances.

The anticipation of lower rates has helped drive yields lower, with the 30 year's falling as much as three basis points to 4.62% on Wednesday, the lowest level since April 30.

He is expected to take part in the closely-watched Federal Open Market Committee meetings scheduled for Tuesday and Wednesday.

The yield on US 10-year debt edged two basis point higher to 4.04% after falling to a five-month low Thursday, but still remained on course for a fourth week of declines.