U.S. Treasury yields mixed as investors digest inflation data

U.S. Treasury yields were mixed on Thursday (16th) as investors assessed the latest inflation data and considered its possible impact on the Federal Reserve\’s monetary policy.

U.S. Treasury yields were mixed on Thursday (16th) as investors assessed the latest inflation data and considered its possible impact on the Federal Reserve\’s monetary policy.
The 10-year Treasury yield fell 1.8 basis points to 4.338% at 6:20 a.m. ET.
The 2-year Treasury yield rose 0.4 basis points to 4.74%.
One basis point when yield and price move in opposite directions is equal to 0.01 percentage point.
Investors digested the latest inflation data hoping they would provide new hints on the future path of the Federal Reserve\’s monetary policy.
The April consumer price index (CPI) released on Wednesday (15th) increased by 0.3% on a monthly basis, slightly lower than the 0.4% expected by economists surveyed by Dow Jones.
Compared with the previous year, the CPI increased by 3.4%, in line with expectations.
The lower-than-expected monthly increase was welcomed by investors who had been hoping the data would show inflation is cooling and could move closer to the Fed\’s 2% target range in the coming months because it could mean the central bank will cut interest rates.
Policymakers have said they will cut interest rates only if data shows inflationary pressures continue to cool.
Federal Reserve Chairman Jerome Powell said earlier this week that interest rate cuts would require patience as inflation remains higher than expected.
Ball\’s remarks came after the producer price index (PPI) released on Tuesday (14th) was higher than expected, rising 0.5% month-on-month in April.
Investors will be watching the latest data from the real estate sector on Thursday, including April building permits and housing starts.
More Fed officials are also expected to speak on both days.

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