Treasuries pared declines before a government report forecast to show that the pace of increases in wholesale prices slowed from the prior month, reinforcing the notion that inflation will remain subdued. Yields on benchmark 10-year notes had climbed for the first time in four days. Producer prices rose 0.8 percent in September from the month before, according to a Bloomberg News survey of 76 economists before the Labor Department report, due at 8:30 a.m. New York time. The increase was 1.7 percent in August. The 10-year note yield rose one basis point to 1.68 percent, after climbing as high as 1.70 percent, according Bloomberg Bond Trader data. The rate reached a record-low 1.38 percent on July 25. The 10-year term premium, a model created by economists at the Federal Reserve that includes expectations for interest rates, growth and inflation, was negative 0.89 percent. A negative reading indicates investors are willing to accept yields below what’s considered fair value. The average for the past 10 years is 0.44 percent. The all-time low was negative 1.02 percent on July 24. The Thomson Reuters/University of Michigan index of consumer sentiment declined to 78 in October from 78.3 a month earlier, according to the median estimate of 71 economists in a separate Bloomberg survey. The September reading was the strongest since May. The central bank is swapping shorter-term debt in its holdings for longer maturities as part of its efforts to support the economy. It plans to buy as much as $2.25 billion of Treasuries due from February 2036 to August 2042 today as part of the plan, according to the Fed Bank of New York website. To contact the reporters on this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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