Treasury prices stumbled in confusion last week after the Federal Reserve snatched the easing carrot from in front of the market's face, but analysts said in the long run, the Fed's restraint should benefit long-term security prices.

Tuesday's report of a 17% drop in April housing starts raised hopes that Fed policymakers would approve another 25 basis point cut in the funds rate target, to 3.5%, at that day's Federal Open Market Committee meeting.

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