Bond Report: Treasury yields fall after tepid eurozone inflation data spark German bund rally

Treasury yields retreated on Thursday by falling rates in European government bonds after eurozone inflation data came in weaker than expected.

The economic report comes a day after the Federal Reserve left interest rates unchanged, as expected, at the conclusion of its policy-setting meeting.

The central bank didn’t do anything to dispel market expectations that it will lift interest rates in June, the seventh time for such a move since the end of 2015, as it aims to normalize monetary policy. But policy makers appeared to hint that they had little fear that inflation was running out of control, which traders took as a sign the Fed won’t feel compelled to move more aggressively than expected to lift rates in the future.

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