Treasuries fell after data hinted that inflation may be on the rise, which added to concerns that the Federal Reserve will not raise interest rates any time soon.
Initial jobless claims rose 1,000 to 339,000. Final GDP for the fourth quarter was an unrevised 4.1%, meeting expectations. The core personal consumption deflator, which the Fed often uses to measure inflation, was revised upwards to a 1.2% rise, instead of 0.7%, suggesting inflation may be building.
On tap tomorrow is personal income and spending data, and a final reading on the University of Michigan Sentiment report.
Treasuries pared losses earlier in the session on a few terror-related headlines, which renewed some discomfort for shorts. A Dow Jones headline said that another terror attack is planned before the election, and recently newswires said an audio tape of No. 2 Al Qaeda bad guy Zawahri called for Pakistanis to overthrow the government.