Treasuries fell on Monday as investors took on riskier investments on hopes that a deeper economic downturn has been avoided due to policy action by the Federal Reserve.

Two year treasury notes fell 8/32 in price to yield 1.952 percent at 2:15 in New York. Ten-year notes were down 27/32 in price to yield 3.572 percent.

Meanwhile, credit markets received a boost after reports that bank Washington Mutual was in advanced talks to raise about $5 billion in capital from private-equity firm TPG Inc. to bolster its balance sheet.

Investors also were also betting that the Federal Reserve would reduce its efforts to cut interest rates when it holds its next scheduled policy meeting on April 30. Futures traded on the Chicago Board of trade showed a 32 percent possibility the Fed would cut rates by 50 basis points to 1.75, down from 52 percent a week earlier.

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