Fed views fan bullish bets on longer-term U.S. Treasuries: JPM

NEW YORK (Reuters) - Investors piled back into longer-dated U.S. Treasuries this week after Federal Reserve policy-makers reduced their outlook on the number of U.S. interest rate increases last week, according to a J.P. Morgan survey released on Tuesday.

Fed officials on average expect two rate hikes in 2016, compared with four increases just three months ago after the U.S. central bank released their forecasts last week following a two-day policy meeting.

The Fed's target range on its policy rate has been 0.25-0.50 percent since December.

According to the J.P. Morgan survey, the share of "long" investors who said on Monday they were holding more longer-dated U.S. government debt than their portfolio benchmarks rose to 21 percent from 16 percent the prior week.

The share of "short" investors who said they were holding fewer longer-dated Treasuries than their benchmarks declined to 19 percent from 25 percent last week.

The share of long investors was greater than the share of short investors by 2 percentage points, which was the most since Feb. 29, J.P. Morgan said.

This compared with a week earlier when short investors outnumbered long investors by 9 points, which was a level not seen since Jan. 25.

The share of "neutral" investors who said they were holding amounts of longer-dated Treasuries that match their benchmarks edged up to 60 percent from 59 percent.

On Tuesday, the benchmark 10-year Treasury yield was 1.898 percent, down 2 basis points from late on Monday.

Prior to the latest Fed forecasts on Wednesday, the 10-year yield touched 2.002 percent, which was the highest level since Jan. 28, according to Reuters data.

(Reporting by Richard Leong Editing by W Simon)

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