Treasury 30-year bond returns topped 30 percent for 2014, surging on the outlook for slow inflation before a government report today that economists predict will show consumer prices fell in November.
U.S. government securities are also benefiting from a flight to safety driven by a currency crisis in Russia. Tumbling oil costs, declining living costs and slowing economic growth around the world are combining to keep inflation in check. Federal Reserve Chair Janet Yellen will hold a press conference today after the central bank ends a two-day meeting.
“Even though the U.S. economy looks OK, I don’t think the Fed will be so hawkish,” said Hajime Nagata, a money manager in Tokyo at Diam Co., which oversees the equivalent of $120.4 billion. “Treasury yields will stay at low levels as long as risk assets including oil keep going down.”