1.   Analysts said it caused some curve flattening, as traders sold longer maturities and bought short-term issues.

2.   But the rates on shorter-maturity bills dropped slightly as some investors sold longer maturities for the less volatile short end of the market.

3.   Investors generally sold shorter maturities at a profit to buy longer ones.

4.   Meanwhile, investors sold long maturities while waiting for some signs of progress in talks aimed at producing a balanced budget.

5.   Shorter maturities fared better, with some investors selling longer maturities to buy shorter maturities and reduce their length of exposure in an unsettled market.

6.   Thursday, the inflation concerns kept many buyers on the sidelines and caused others to sell long maturities and seek refuge in the shorter maturities.