The 10 year notes were yielding 4.43% compared to 4.575% earlier Monday, while the 30 year bonds were yielding 4.74% from an earlier 4.775%. Yields fall when demand rises.
Investors shrugged off a report that President George W. Bush nominated 3rd Circuit Court Judge Samuel Alito for the Supreme Court. News hit that the U.S. Chicago Purchasing Managers Index rose to 62.9 in October, well above expectations of a decline to 58.0. Personal Consumption Expenditures rose 0.5% in September, erasing the 0.5% drop in August. August's core personal consumption expenditures index, the Fed's preferred inflation measure, was revised down to 0.1% from 0.2%.
The market fell last week after Gross Domestic Product news turned out better than analysts' expected. Investors bet that the Fed will raise Fed funds rates 25 basis points Tuesday to 4.00% to combat chances of inflation.