Fedspeak was the wildcard, however, that tipped the scales back away from Fed tightening expectations, with Bernanke, Parry and McTeer all ganging up to argue in favor of giving growth a chance. Architect of the Fed's dis/deflation policy, Bernanke even argued the Fed could still ease policy in the short run and acknowledged that some miscues between the Fed and bond market. 2-year yields broke 13 basis points back below the 2-handle to 1.87%, while the T-note yield eased 8 basis points to 4.50%.
With prices at the front-end outperforming sharply, the 2-year note and 30-year bond spread widened 6 basis points +341 basis points. The December bond closed up 20/32 at 104-28. Deferred contracts along the euro$ strip gained some 12-16 ticks, while agency and swap spreads continued to narrow as yields dipped. Stocks finished slightly firmer.