Treasury prices gave back earlier gains on Friday after the Federal Reserve announced a plan to boost loans to banks, offsetting early news that the U.S. lost more jobs than expected in February.

Two-year notes were little changed, slipping 1/32 in price to yield 1.536 at 3:29 p.m. in New York after dipping to 1.40 percent earlier, its lowest level since July 2003. Ten-year notes rose 9/32 in price to yield 3.560, down 3 basis points.

Treasuries fell today after the U.S. central bank announced it would provide as much as $200 billion to the banking system to help ease a liquidity crisis at banks that has significantly slowed the economy.

The Fed will provide $100 billion through auctions of 28-day repurchase agreements, adding that the move was unrelated to today's jobs report. The Fed said it would boost the size of two short term auctions for funding to banks to $100 billion from $60 billion.

Earlier in the day, new data about jobs raised fears that the economy may already be in a recession. U.S. Labor Department reported that the country lost 63,000 jobs in February after a loss of 22,000 jobs the previous month. A survey by Bloomberg had estimated a median figure of 23,000 job losses.

The municipal bond market got a boost of stability which also contributed to some losses in treasuries. Ambac Financial Group raised $1.5 billion in a stock auction and convertible equity units in an effort to safeguard its vital, top-level AAA credit rating. Insurers depend on high credit ratings to assure customers that their investments will be secure in case bond issuers default.