Updated Friday, October 31, 2014 as of 2:16 AM ET

Treasury Yields in Tightest Range Since 2007 Before Fed Decision

(Bloomberg) -- Treasury yieldswere in the tightest range in nearly seven years as traders weighed prospects for Federal Reserve bond tapering against concern tension between the U.S. and Russia over Crimea will increase.

The 10-year yield moved in a range of less than two basis points today, the least since April 9, 2007, and averaged 5.8 basis points this year compared with 8.3 points in the past five years. Economists say the Fed will cut monthly bond purchases to $55 billion and end its threshold for a 6.5% jobless rate for when it will raise interest rates, according to Bloomberg surveys. Western leaders vowed further sanctions on Russia after President Vladimir Putin set in motion Crimea’s accession.

“The Fed will probably be slightly dovish given some weather-related weakness we’ve seen in recent data but we expect the taper to continue,” said Soeren Moerch, head of fixed- income trading at Danske Bank A/S in Copenhagen. “The market is also watching developments in Ukraine, whether the problem will spread. We expect the 10-year yield to move within its recent range of 2.50 to 2.80% in the near term.”

The benchmark 10-year yield was little changed at 2.67% at 6:50 a.m. in New York after falling two basis points, or 0.02 percentage point, yesterday, according to Bloomberg Bond Trader data. The price of the 2.75% note maturing in February 2024 was 100 22/32.

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