U.S. Treasury yields were flat Wednesday, as investors prepared for key inflation data later this week and digested diverging commentary from Federal Reserve officials on the path of rates.
At 5:42 a.m. ET, the yield on the 10-year Treasury was down by less than 1 basis point at 4.016%. The 2-year Treasury was steady at 4.758%.
Yields and prices have an inverted relationship. One basis point equals to 0.01%.
Market participants will closely watch the U.S. consumer price index on Thursday and the producer price index on Friday for signs of persisting inflation.
The CPI print is expected to show a 0.2% increase in July, according to a Dow Jones consensus estimate, but the Cleveland Federal Reserve’s Inflation Nowcast model suggests a 0.4% rise.
Philadelphia Fed President Patrick Harker on Tuesday said that the current hiking cycle may have come to an end. But Federal Reserve Bank Governor Michelle Bowman on Monday said she believes rates have further ground to climb to bring inflation to target.
The Fed will hold three more monetary policy meetings this year, with the next monetary policy announcement due out on Sept. 20.
A key question that is dividing market-watchers is whether the U.S. will avoid a recession.
The July jobs report showed that the labor market may be cooling slightly, while staying resilient.
