NEW YORK, June 8 (Reuters) - U.S. Treasury long-dated yields pared gains on Thursday, in line with German bonds, after the European Central Bank reduced its inflation forecast to reflect lower oil prices.
The lower inflation outlook suggested that the ECB will likely keep its stimulus program for now even though growth projections for the region were revised higher.
The ECB now expects inflation of 1.5 percent in 2017 and 1.3 percent in 2018, compared with its forecasts of 1.7 percent and 1.6 percent respectively in March. That is still well below its target of just under 2 percent.
Further pushing yields lower was a remark by ECB President Mario Draghi, who said reducing the central bank’s stimulus plan for the region was not discussed at the meeting.
Benchmark German 10-year bonds hit session lows of 0.253 percent after Draghi’s comment.
In early trading, U.S. 10-year Treasuries were last down 1/32 in price, with yields at 2.185 percent, compared with 2.198 percent before Draghi spoke.
U.S. 30-year bonds fell 4/32 in price, yielding 2.842 percent, slipping from 2.853 before Draghi’s briefing. (Editing by Bernadette Baum)