US Treasury debt prices were little changed today after a weaker-than-expected reading on March consumer sentiment did little to change the outlook for interest rates.
The weaker consumer confidence was offset by an increase in consumers' inflation expectations. Inflation erodes the value of a bond over time.
"The market is not doing anything with this mix of data on consumer confidence, but to our eyes the softer economic tone versus the gain to inflation expectations reflects current market worries quite well," said David Ader, government bond strategist at RBS Greenwich Capital in Greenwich, Connecticut.
The Conference Board's US consumer confidence index fell to 107.2 in March, below analysts' expectations, from a downwardly revised 111.2 in February. However, one-year consumer inflation expectations rose to the highest since October.
Investors are now looking for market direction from testimony by Federal Reserve Chairman Ben Bernanke before the Joint Economic Committee of Congress, as well as the auction of $18 billion of two-year Treasury notes on Wednesday.