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Long-Term US Treasury Yields Rise on Risk Aversion, Curve Flattens

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By Davide Barbuscia

NEW YORK, March 18 (Reuters) – Long-term U.S. Treasury yields fell on Friday as the lack of a resolution to the conflict between Russia and Ukraine continued to weigh on markets, while short-term yields rose. , further flattening the curve.

* The benchmark 10-year yield fell to 2.161% from 2.167% and the 30-year bond yield stood at 2.439% from 2.461% on Thursday, in a sign of risk aversion.

* Two-year bond yields, which accurately reflect monetary policy expectations, rose slightly to 1.954% from 1.915%, after the Federal Reserve raised interest rates on Wednesday for the first time in three years.

* As the fourth weekend of the conflict approached, the positions of Russia and Ukraine appeared to be far apart.

* The portion of the curve comparing two-year notes to 10-year notes, closely watched by the market, fell to 21.4 basis points from 25.4 basis points on Thursday, reflecting growing concern about the impact of tighter monetary policies on the economic outlook.

* A reversal of that part of the curve – with higher short-term yields than longer ones – has generally indicated the risk of a recession.

* Saint Louis Federal Reserve Bank President James Bullard on Friday called for a sharp interest rate hike to more than 3% this year, calling for the US central bank to move quickly to counter runaway inflation. .

* Fed fund futures traders are pricing in a 51.6% chance that the rate will rise 50 basis points at the next Fed meeting in May.

(Reporting by Davide Barbuscia; Editing in Spanish by Javier Leira)

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