U.S. companies are funneling extra money into their pension funds to take advantage of temporary tax savings, moves that are helping suppress yields on long-term Treasurys, the Wall Street Journal reported. S&P 500 companies are contributing to pension plans this year at a pace expected to nearly match 2017’s level, which at $63 billion was the most since 2003, according to Goldman Sachs Asset Management. Last year’s contributions were spurred in part by companies anticipating changes in the U.S. tax-code overhaul. That and continued contributions this year have been a boon for the Treasury market because pension funds tend to invest in long-dated bonds to match their long-term liabilities. The yield on the 30-year bond has been falling recently, closing at 2.959 percent on Tuesday, down from a recent peak of 3.245 percent in mid-May. Analysts are pinning the drop in yields — which happens as prices rise — partly on demand from pension funds. Long-term rates have remained low and U.S. inflation has picked up this year.
