(Bloomberg) — US government bonds rallied Friday, adding to their monthly gain, after benign inflation data kept alive predictions that the Federal Reserve will cut interest rates at least once this year.
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The data showed that the Fed’s preferred measure of consumer price trends was stable in April at 2.7% year-on-year. Treasury yields across the maturity spectrum declined at least five basis points to the lowest levels of the week as traders added slightly to wagers on a quarter-point Fed rate cut as early as September.
While several pieces of major economic data will be released before the Fed’s next meeting on June 12 — including the April employment report next Friday — policymakers by convention cease commenting starting a full week beforehand, a period that begins this weekend.
“Inflation continues to move in the right direction,” said Jack McIntyre, a portfolio manager at Brandywine Global…
