Treasuries rose as a report showing record U.S. crude inventories damped inflation projections amid signs the global economic slowdown is catching up with the U.S.
The 30-year bond yield approached record lows before the Federal Reserve ends a policy meeting and provides an update on plans to raise interest rates later this year. Greek stocks and bonds slumped on concern the nation’s newly elected government will seek to overturn austerity measures, fueling haven demand. The Treasury’s auction of $26 billion of two-year notes attracted a lower-than-forecast yield.
“There are economic headwinds domestically and abroad,” said Ian Lyngen, a government-bond strategist at CRT Capital Group LLC in Stamford, Connecticut. “Oil is leaking lower and equities have come off. The combination of the two has extended the flight-to-quality bid in the Treasury market. The Greek story is a background factor that helped the Treasury market.”