November 16, 2018 / 2:40 PM / a month ago

TREASURIES-Yields on 2-year, 10-year notes slide to 2-week lows after Fed comments

NEW YORK, Nov 16 (Reuters) - U.S. benchmark Treasury 10-year and two-year yields fell to two week lows on Friday after a top Federal Reserve official said U.S. interest rates are nearing the central bank’s estimates of a neutral rate.

In a CNBC interview at the U.S. central bank’s Washington headquarters, Fed vice chair Richard Clarida said he does not believe the Fed has raised rates too far or too fast.

But he noted that the Fed needs to be particularly data-dependent as rates near the 2.5 percent to 3.5 percent range that Fed officials estimate as a neutral level that neither stimulates nor brakes a healthy economy.

Analysts said his comments suggested that the Fed may be nearing the end of its tightening cycle. The Fed typically stops raising rates once they hit the neutral level.

In morning trading, U.S. 10-year note yields fell as low as 3.081 percent, down from 3.118 percent late Thursday. Yields were last at 3.084 percent.

On the short end of the curve, U.S. two-year yields slid to a two-week trough of 2.812 percent, compared with Thursday’s 2.862 percent. (Reporting by Gertrude Chavez-Dreyfuss Editing by Chizu Nomiyama)

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