Treasuries Close Moderately Higher Amid Pullback By Stocks

(RTTNews) - After initially showing a lack of direction, treasuries moved moderately higher over the course of the trading day on Tuesday.

Bond prices lingered near the unchanged line for much of the morning before moving to the upside in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.7 basis points to 2.509 percent.

The strength among treasuries came as some traders looked to the safety of bonds amid significant weakness among stocks, which came under pressure on the heels of comments from Philadelphia Federal Reserve President Charles Plosser.

In a speech in Washington, Plosser said the Fed may be required to begin raising interest rates sooner rather than later as inflation moves close to the 2 percent target and the labor market improves.

Plosser also said scaling back the Fed's asset purchases at the current pace of $10 billion per meeting may leave the central bank behind the curve if the economy continues to play out according to forecasts.

Meanwhile, in separate remarks, New York Fed President William Dudley predicted that the pace of eventual interest rate increases will be relatively slow.

The remarks from the Fed officials come ahead of the release of the minutes of the Fed's latest monetary policy meeting on Wednesday.

The minutes of the April meeting may shed some additional light on the central bank's outlook for the economy and monetary policy.

Ahead of the release of the minutes, traders will also hear remarks by Fed Chair Janet Yellen, Kansas City Fed President Esther George and Minneapolis Fed President Narayana Kocherlakota.