June 25 (Bloomberg) -- Treasuries extended gains as the U.S. economy contracted in the first quarter by the most since the depths of the last recession.
Benchmark 10-year note yields fell as another report showed demand for durable goods, items meant to last at least three years, decreased 1 percent. Treasuries climbed earlier as concern turmoil in the Middle East is escalating renewed the refuge appeal of U.S. government debt. New York Fed President William C. Dudley said investor expectations that the central bank may raise interest rates in mid-2015 may be incorrect. The Treasury will auction $35 billion of five-year debt and $13 billion of two-year floating-rate notes today.
Benchmark 10-year yields fell four basis points, or 0.04 percentage point, to 2.54 percent from yesterday, when they dropped five basis points, or 0.05 percentage point, according to Bloomberg Bond Trader data.
U.S. government debt rose as gross domestic product fell at a 2.9 percent annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previously reported 1 percent drop, the Commerce Department said today in Washington.