Treasuries Rise as Unexpected Wage Drop May Delay Fed Increase

Treasuries rose after a government report showed wages unexpectedly declined in December, sparking speculation the Federal Reserve will take a slower pace with interest-rates increases.

Two-year note yields fell to a three-week low as futures showed a 50 percent probability of a Fed rate increase by September, down from 57 percent yesterday, after the Labor Department said average hourly earnings of workers dropped 0.2 percent. Treasuries have rallied this week as oil prices snapped a two-day upward streak, resuming declines that are damping the outlook for inflation.