March 18 (Bloomberg) -- Treasuries erased gains as President Vladimir Putin said Russia is not looking to split Ukraine, sapping demand for the safety of U.S. government debt.
Benchmark 10-year yields fell as much as three basis points before Putin said at a press conference in Moscow that Crimea will not be followed by other regions. U.S. government debt rose earlier when Putin said he supported a request the breakaway region to join Russia. The Federal Reserve starts a two-day meeting that economists said will end with a decision to further scale back its bond purchases.
“The market is mis-priced,” said Thomas Roth, senior Treasury trader in New York at Mitsubishi UFJ Securities USA Inc. “The fear trade kept them down here. We came off on the comment that Russia doesn’t want the Ukraine to be divided further.”
Benchmark 10-year yields were little changed at 2.69 percent at 8:16 a.m. New York time after touching 2.66 percent, Bloomberg Bond Trader data showed. They dropped to 2.61 percent on March 14, the lowest since March 4. One basis point equals 0.01 percentage point. The 2.75 percent note due in February 2024 cost 100 17/32.