Treasury prices rose Friday, pushing yields lower, before the Federal Reserve's expected purchase of notes maturing in two and three years, its second such operation to boost financial markets and lower borrowing rates.
Three-year note yields fell 3 basis points, or 0.03%, to 1.24%.
Yields on benchmark 10-year notes ) fell 1 basis point to 2.73%.
On Wednesday, the Fed bought $7.5 billion in debt maturing between 2016 and 2019, much more than dealers said they had expected. Dealers submitted $21.9 billion in debt to be purchased that day.
Other maturities are slated to be bought next week, as the Fed embarks on buying $300 billion in Treasury securities.
Traders also noted some relief after the market absorbed $98 billion in note sales this week and has some reprieve until the next round of auctions starting April 7.
The buyback program "has certainly provided a psychological cap on rates and comfort that we have a window of two weeks of no supply," said John Spinello, Treasury strategist at Jefferies & Co.
U.S. debt remained higher after the government said consumer spending rose 0.2% last month, in line with economists' expectations. See more on consumer spending report.
Also coming out Friday is a report on consumer sentiment this month, which some analysts predict will show a slight improvement.
"The good news is sentiment is stabilizing," said T.J. Marta, strategist and founder of research firm Marta on the Markets. "The bad news is it appears mired at the worst levels since the final months of the Carter Administration in 1980."
