The US 30-year Treasuries yield fell to a record low on Wednesday as disappointing US retail sales data raised bets the Federal Reserve would not raise interest rates this year.
A 0.9 percent drop in retail sales in December, the steepest in 11 months, extended the US bond market's rally in the first two weeks of 2015, which has been underpinned by worries about deflation spreading across Europe and the effect of tumbling oil prices on corporate earnings and capital investments.
"People had thought lower oil prices would help consumer spending. People are very confused so they run into safety assets," said Stanley Sun, interest rate strategist at Nomura Securities International in New York.
Another sell-off in US stocks added to the safe-haven bid for Treasuries, sending the 30-year yield to a record low of 2.395 percent, according to Tradeweb.
The bond market pared its gains in late trading with a bounce in US oil prices in late trading. Oil futures settled up 5.6 percent at $48.48 a barrel.
In late US trading, the 30-year bond yield was 2.455 percent, down 3 basis points from late Tuesday.
The yield on the benchmark 10-year Treasuries note was 1.840 percent, down 5 basis points after hitting a near 20-month low of 1.784 percent. The 10-year yield remained above its record low of 1.381 percent set in July 2012. Earlier, the five-year yield posted a three-month low at 1.247 percent, while two-year yields fell to 0.452 percent, the lowest since October 29, according to Reuters data.
In the futures market, short-term US interest rates futures implied traders expect the Fed to refrain from raising rates until late 2015 at the earliest even as many economists at top Wall Street forecast a rate lift-off mid-year.
On Wall Street, the Standard & Poor's 500 fell for a fourth straight session, last down 0.95 percent on the day.