German Bond Yields at Record Low on Fed; Irish Debt Plunges

German 10-year bonds rose, pushing yields to a record low, after the Federal Reserve decided to keep its bond holdings steady to support the weaker-than-anticipated economic recovery.

Two-year note yields also declined. The Fed yesterday opted to reinvest principal payments from maturing mortgage bonds into U.S. Treasuries to keep borrowing costs low. German and Japanese bonds surged as investors bet the central bank may do more in the future. Irish bond-yield premiums over German bunds surged to the highest in a month amid deepening concern over the health of the island nation’s banks.