| Old conundrum, new twist
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| Inverted or flat, the yield curve points to a weaker Federal Reserve, not a downturn. (Full story)
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NEW YORK (CNN/Money) -
U.S. Treasury debt prices fell Thursday as factory surveys showing an energy-related jump in prices renewed inflation fears, while the dollar rose against the euro and the yen.
The 10-year Treasury note fell 15/32 of a point to 100-7/32 to yield 4.21 percent, up from 4.16 Wednesday, while the 30-year note sank 1-3/32 points to 112-28/32 to yield 4.51 percent, up from 4.45. Bond prices and yields move in opposite directions.
The two-year note lost one tick to yield 3.89 percent, while the five-year note fell 6/32 to yield 3.99 percent.
Morning price gains made on grim jobless data were erased by a sharp increase in prices in the New York Fed's Empire State index, to 53.41 in September from 29.0 in August.
But the Philadelphia Fed survey set off a wave of selling in longer-dated debt, with the 30-year down more than a point in the afternoon, after it also showed a sharp rise in prices paid to 52.7 from 25.9.
The combined effect of the reports reaffirmed fears that spiking energy prices have filtered through to factories, offsetting the fact that actual factory activity in both regions stalled in early September.
"Given the jawboning we have had from the Fed about concern of inflation, I think the market is just playing it precautionary before the Fed meeting," Mary Ann Hurley, a trader with D.A. Davidson & Co., told Reuters.
In currency trading, the dollar rose against the euro and the yen. The euro bought $1.2221 down from $1.2280 late Wednesday, while the dollar bought ¥110.66, up from ¥110.35.
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