U.S. Treasury yields were little changed Thursday as investors digested consumer inflation data and considered the outlook for interest rates.
At 6:25 a.m. ET, the yield on the 10-year Treasury was up by 1 basis point to 4.552%. The 2-year Treasury yield was last at 4.961% after rising by less than one basis point.
Yields and prices have an inverted relationship and one basis point equals 0.01%.
Treasury yields had jumped on Wednesday, with the yield on the 2-year and 10-year Treasurys climbing by as many as 22 and 18 basis points, respectively. That came as the March consumer price index came in above expectations, showing that inflationary pressures are persisting.
The CPI was 0.4% higher in March from February and rose 3.5% from a year earlier. Economists polled by Dow Jones had been expecting increases of 0.3% on a monthly and 3.4% on an annual basis.
The so-called core CPI, which excludes food and energy prices, was 0.4% higher from February and 3.8% from a year ago. These readings were also slightly higher than anticipated.
The data fueled concerns that interest rate cuts may not begin when the Federal Reserve meets in June, a timeline many investors have been expecting. According to CME Group’s FedWatch tool, traders were last just pricing in a 17% chance of a rate cut taking place then, significantly lower than before the CPI release.
Another inflation data release is slated for Thursday, this time in form of the producer price index, which tracks prices on a wholesale level. Economists surveyed by Dow Jones are expecting the PPI to have risen by 0.3% in March and the core PPI to have increased 0.2%.
Also on Thursday, weekly initial jobless claims figures will be published.
