U.S. Treasury yields were little changed on Thursday as investors considered the outlook for inflation following Wednesday’s consumer price index report and awaited further key economic data.
At 6:10 a.m. ET, the yield on the 10-year Treasury was up 1.2 basis points to 4.26%. The 2-year Treasury was last trading unchanged at 4.984%.
Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.
Investors digested Wednesday’s consumer price index report, which came in just above expectations as it rose by 0.6% on a monthly basis and 3.7% from a year ago. Economists previously surveyed by Dow Jones had anticipated increases of 0.6% and 3.6%, respectively.
Core CPI, which excludes energy and food prices, rose by 0.3% on a monthly basis and 4.3% on an annual basis, again just off previously estimated figures of 0.2% and 4.3%.
The data comes as uncertainty about the outlook for Federal Reserve monetary policy has grown in recent weeks. Various Fed officials suggested rates may go higher still and cited economic data, especially that pertaining to inflation, as a pivotal factor for policy decisions ahead.
Markets were last pricing in a 97% chance of rates being left unchanged when the Fed meets next week, according to CME’s FedWatch tool. However, the picture is more split for the central bank’s November meeting, with a 40% chance of a rate increase being announced then.
Further inflation data is expected Thursday in form of the producer price index, which is expected to have increased by 0.4%, according to a Dow Jones survey of economists. That would be just above July’s 0.3% reading.
Retail sales figures are also due Thursday, followed by the latest consumer sentiment report on Friday.
