T-Notes last up 1 tick at 12.23+, just......>

US TSYS: T-Notes last up 1 tick at 12.23+, just off session highs of 124.25+ hit

after comments from Philadelphia Fed President Harker said he had "lightly

penciled in" another hike for this year. Harker also said that low inflation is

a "conundrum" for the Fed and said this posed a reason to cautious.

- Harker said that the tightening cycle did not mean the Fed was "taking away

the punch bowl" and that conditions would be accomodating enough in the future.

- Harker also noted that he expected the balance sheet unwind process to be

smooth.

- Seeing some buying in the short end, long end sells off, reversing the

steepening of the curve seen at the end of last week. 2/30-Year spread 0.9bp

tighter.