Treasuries rose, pushing yields on 30-year bonds to almost the lowest this month, after a report showed that inflation remains below the Federal Reserve’s target even with the economy expanding and adding jobs.
The U.S. sale of $13 billion in inflation-index notes received higher-than-average demand as investors sought a hedge against gains in consumer prices after the Labor Department said its measure excluding food and energy increased the most in five months while the overall cost of living was unchanged. The median forecast in a survey by the Fed Bank of New York of the 22 primary dealers that trade with the central bank was for interest rates to go up in June for the first time since 2006.
“Inflation expectations are still quite low, and it’s hard to see them turning around anytime soon,” said Thomas Simons, a government-debt economist in New York at Jefferies LLC, one of the 22 primary dealers deal with the Fed.
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