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2 Dec 2014
US Treasury yields at the long-end fall amid weakened inflation outlook
FXStreet (Mumbai) - The 30-year treasury yield in the US fell below the 3% level in last week and continues to trade below the 3% mark on weakened inflation outlook.
A gauge of inflation expectations, showed by the difference between the Ten-year yields and similar-maturity Treasury Inflation Protected Securities traded at almost the lowest level in three years. It dropped to an Oct 2011 low of 1.79% yesterday. Moreover, bond markets are gaining strength on speculation that a slowdown in inflation will allow the Federal Reserve to delay the interest rate hike.
The Ten-yields had declined to 2.15%, while the 30-year yield had hit a low of 2.876%. However, the yields bounced back after the Fed officials said the decline in Oil prices would be positive for the economy. Bond prices also fell after the ISM manufacturing index came-in higher than economists forecast.
A gauge of inflation expectations, showed by the difference between the Ten-year yields and similar-maturity Treasury Inflation Protected Securities traded at almost the lowest level in three years. It dropped to an Oct 2011 low of 1.79% yesterday. Moreover, bond markets are gaining strength on speculation that a slowdown in inflation will allow the Federal Reserve to delay the interest rate hike.
The Ten-yields had declined to 2.15%, while the 30-year yield had hit a low of 2.876%. However, the yields bounced back after the Fed officials said the decline in Oil prices would be positive for the economy. Bond prices also fell after the ISM manufacturing index came-in higher than economists forecast.