US Treasury Rally Sends Yields Back Below 4% as Inflation Cools
- February index return of 1.7% marks best month since July
- Two-, three- and five-year yields touch lowest since October
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The US Treasury market posted its biggest monthly gain since July, ending the period with short-term yields back below 4% as benign inflation data boosted wagers on Federal Reserve interest-rate cuts.
Yields on two-, three- and five-year Treasury notes fell as much as six basis points Friday to levels last seen in October after data showed inflation-adjusted consumer spending unexpectedly dropped last month, leading some economists to trim their estimates for firs-quarter growth. The 30-year yield dipped below 4.5% for the first time since mid-December amid month-end buying.