At this juncture, it would be difficult to attract strong demand, especially for 30-year maturity. It will trigger higher yields in 10-year securities.

The economic picture has not changed and it is still one that shows growth will be strong. The data we are seeing does not argue for a sustainable decline in yields.

The inflation data we will see this week and next will support the view the Fed can keep on hiking at the next two meetings. Yields will rise led by the shorter-maturity debt.

Employment growth will keep the economy going and the bond market will be susceptible to the strength of the data that will push the Fed to hike rates again. We expect yields to rise.

Sentiment is building that the Fed may pause for a while after raising rates to 5 percent next month. That helps shorter-maturity debt, especially two-year notes.

The Fed is concerned that higher energy costs may give an adverse impact on growth rather than posing a risk to faster inflation. Producer prices also showed latent inflationary pressure eased.