US bond yields fall as Q4 GDP disappoints

NEW YORK: US Treasury yields fell on Thursday, with benchmark yields slipping below 2.50 percent, as data showing a sharper-than-forecast slowing in economic growth in the fourth quarter spurred buying of US government debt.

The selling in bonds was tempered by relatively solid readings on consumer spending and business investments, supporting the view the economic expansion remained on track.

"The headline figure was softer-than-expected, but it's mostly due to weaker trade. The underlying figures were better-than-expected," said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research.

Gross domestic product grew at a 1.9-percent annualized pace in the final three months of 2016, compared with a 3.5-percent rate in the third quarter. Analysts polled by Reuters had forecast a 2.2 percent GDP growth pace.

Trade subtracted 1.70 percentage points from GDP growth in the last quarter after adding 0.85 percentage point in the third quarter.

Benchmark 10-year Treasury yield was down 1 basis point at 2.495 percent, retreating further from a four-week high reached on Thursday.