U.S. Bonds Continue to Defy Bears --- Prices Push Higher, Driving Yields to New Lows, as Global Fears Trump Worries About Inflation
Government-bond yields touched new lows in the U.S. and Germany, as investors piled anew into ultrasafe debt amid growing concern about the pace of European growth.</br></br>The gains underscore the dynamics that have made government bonds a surprise star performer this year -- a winning streak many analysts now expect will continue.</br></br>When 2014 started, many Wall Street strategists predicted interest rates would rise, sending bond prices lower, as the U.S. economy picked up speed and the Federal Reserve reduced its monthly stimulus, due to end in October.</br></br>Instead, government-bond prices have surged amid softness in Europe's economy and geopolitical tumult, sending yields down to levels rarely seen. Bonds in Europe have gained even more than those in the U.S., fueled by slowing economic growth and fears that trouble in Ukraine could spiral.</br></br>The rally in European debt has made U.S. government bonds look like a relative bargain, some investors say.