NEW YORK, Jan 22 (Reuters) - The U.S. bond market's gauges on inflation expectations fell on Thursday, paring their initial gains, as crude futures turned lower with a stronger dollar exerting downward pressure on commodity prices.
A dramatic drop in oil prices since mid-2014 has stoked worries about deflation spreading globally.
Earlier Thursday, the yield spreads between U.S. Treasury Inflation-Protected Securities (TIPS) and regular Treasuries, or inflation breakeven rates, grew to their widest levels since December in anticipation of the European Central Bank embarking on a massive bond purchase program to stem deflation spreading across the euro zone.
The five-year TIPS breakeven rate was last 1.24 percent, up 1.7 basis points from late on Wednesday. This measure of investors' medium-term inflation expectations was as high as 1.26 percent, which was the highest since Dec. 11, according to Tradeweb.
On the New York Mercantile Exchange, crude futures for March delivery was down 47 cents at $47.31 a barrel. (Reporting by Richard Leong; Editing by Chizu Nomiyama)