(Updates market action, adds background)
NEW YORK, March 31 The U.S. bond market's gauges
on inflation expectations are on track to decline for the second
straight month due to lower energy prices and reduced
expectations that fiscal stimulus from Washington will bring
faster economic growth.
The 10-year inflation break-even rate, or the yield
difference between 10-year Treasury Inflation Protected
Securities and regular 10-year Treasury notes, was last at 1.97
percent, down almost 1 basis point from Thursday and nearly 6
basis points lower than a month earlier, Tradeweb and Reuters
The decline in TIPS break-even rates was mitigated by data
that showed U.S. inflation had moved closer to the Federal
Reserve's 2 percent goal.
On Friday, the core rate on personal consumption
expenditures grew 0.2 percent in February, in line with
analysts' forecasts. That brings the Fed's preferred inflation
gauge's year-over-year increase to 1.8 percent.
In March, U.S. oil futures fell to near $50 a barrel
from about $55 at end of February on record domestic crude
inventories and concerns about whether the Organization of the
Petroleum Exporting Countries' output cuts are enough to solve
Furthermore, TIPS break-even rates have fallen in recent
days on doubts about whether U.S. President Donald Trump and a
Republican-controlled Congress could enact tax cuts, looser
regulations and infrastructure spending to boost the economy
later this year.
(Reporting by Richard Leong; Editing by Chizu Nomiyama and Lisa