Bank of America Merrill Lynch’s MOVE index measuring price swings in Treasuries fell to an all-time low of 49.24 yesterday.
The ADP Employer Services report showed that employers added 119,000 jobs last month, compared with a forecast of 150,000 jobs in a Bloomberg News survey of economists.
The Federal Open Market Committee plans to release a statement at 2 p.m. after a meeting in Washington. None of the 47 economists in a Bloomberg survey taken April 25-29 expects a decision at this week’s meeting to change the pace of its asset purchases.
The Fed is buying $85 billion of bonds each month to put downward pressure on borrowing costs. While Chairman Ben S. Bernanke said after the previous meeting on March 20 that further labor-market gains were needed to consider reducing monetary easing, minutes showed several officials discussed slowing the pace of buying.
The central bank plans to purchase $44 billion in Treasuries this month, just below the $45 billion monthly target given that it purchased about $46 billion of the securities in April.
The Fed spent $2.3 trillion on Treasury and mortgage- related debt from 2008 to 2011 in the first two rounds of its stimulus policy known as quantitative easing.
“We don’t expect any changes from the Fed today and see no indications of tapering,” said Michael Leister, an interest- rate strategist at Commerzbank AG in London. “The data has been surprising to the downside. We are looking for yields to grind lower.”
The Institute for Supply Management’s gauge of manufacturing declined to 50.5 in April from 51.3 the previous month, according to the median estimate of economists surveyed by Bloomberg before the data.
U.S. gross domestic product grew less than economists forecast in the first quarter, the Commerce Department said April 26. Business activity in the U.S. unexpectedly shrank in April for the first time in more than three years, the MNI Chicago Report said yesterday.