Bond market inflation outlook ebbs before Fed's favored index | 2016-03-29

Bond market inflation outlook ebbs before Fed's favored index

29 March, 2016 12:00 AM printer

Washington: Treasury market inflation expectations have slipped from this year’s high before a report that economists said will show the Federal Reserve’s preferred gauge of price increases slowed last month.
The difference between yields on 10-year notes and similar-maturity Treasury Inflation Protected Securities, a gauge of where traders see consumer prices over the life of the debt, was 1.58 percentage points. The figure has dropped from 1.67 a week ago and compares with the central bank’s target of 2 percent, reports Bloomberg.
“Inflation is still under control,” said Kim Youngsung, head of overseas investment in Seoul at South Korea’s Government Employees Pension Service, which oversees $12.8 billion. “There’s still a lot of demand” for Treasuries, he said.
U.S. 10-year note yields were little changed at 1.91 percent as of 9:25 a.m. in London, according to Bloomberg Bond Trader data. The price of the 1.625 percent note due in February 2026 was 97 14/32.


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