TREASURIES-U.S. yield curve flattens as Fed sees less risks

NEW YORK, July 27 (Reuters) - The spread between shorter-dated and long-dated Treasury yields contracted on Wednesday after the Federal Reserve said near-term risks on the U.S (Other OTC: UBGXF - news) . economy had abated, leaving the door open to raise interest rates later this year.

The yield difference between U.S. 5-year and 30-year Treasuries briefly narrowed to just under 110 basis points, which was its tightest level since March 2015 as traders favored longer-dated bonds which will fare better than shorter issues if the Fed increases short-term rates and inflation remains tame. (Reporting by Richard Leong; Editing by Chris Reese)