And how to cope with those large-class evening lectures: Buy the lecture notes.

"An investor who bought 10-year notes and put them away probably won't be embarrassed by the purchase," he said.

"Do you think people will want to buy two-year notes when Greenspan will talk an hour after they are awarded?"

It can buy Treasury bonds and notes from banks, an action that puts more cash into the banking system.

Traders said the better inflation numbers are prompting some accounts to buy longer-term notes and bonds.

Traders said hedge funds were buying two- and five-year notes, which had a positive effect on the long end of the market.

Aside from those worries, the price drop was also fed by investors who had bought notes and bonds at last week's Treasury auctions.

The quickest way for investors to protect the value of their portfolios is to buy Treasury bonds and notes, which cannot be paid off early.

But some large buyers, not knowing whether the Fed would raise short-term rates after they had bought notes with a lower rate, stayed away.

"People are buying notes and bonds, not just bills."