US bond prices higher on inflation news

Prices on US Treasury bonds were higher on Monday, sending yields lower as data indicated that inflation might be dropping closer to targets set by the US Federal Reserve. If the trend continues, some analysts say, the Fed could cut interest rates before the year is out. The Fed’s favorite measure of inflation, the Personal Consumption Expenditure (PCE) index, showed that core prices – which exclude costs for food and energy – rose by 2.1 percent in March year over year, just above the target range of 1 to 2 percent.

Two-year Treasury bonds were yielding 4.62 percent, declining from yields of 4.66 percent late in the day on Friday. Five year issues were yielding 4.54 percent, while ten-year paper yielded 4.64 percent and thirty-year bonds were at a yield of 4.84 percent.

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