U.S. Treasury yields pulled back on Thursday as investors digested January’s hotter-than-expected consumer price index report and looked ahead to more inflation insights.
At 3:45 a.m. ET the 10-year Treasury yield was down by more than three basis points to 4.597%. The 2-year Treasury yield was last at 4.332% after dipping by over three basis points.
One basis point equals 0.01%. Yields and prices move in opposite directions.
Treasurys
Treasury yields had jumped on Wednesday after the release of January’s consumer inflation report. Data from the Bureau of Labor Statistics showed that the consumer price index rose 0.5% on a monthly basis in January and 3% from a year earlier. Economists surveyed by Dow Jones had been expecting increases of 0.3% and 2.9%, respectively.
So-called core inflation, which excludes food and energy costs, rose 0.4% for the month and 3.3% on an annual basis. That was also higher than the expected 0.3% monthly rise and the 3.1% year-over-year increase.
Wednesday’s data is set to inform expectations on whether there will be more interest rate cuts from the U.S. Federal Reserve. In January, the Fed kept rates unchanged after three reductions in a row.
When speaking before the House Committee on Financial Services, central bank chief Jerome Powell on Wednesday suggested that the stronger-than-expected print was a reminder that progress has been made when it comes to bringing inflation closer to its 2% target but that it is “not quite there yet.”
More inflation insights will be published on Thursday in form of the producer price index for January, which tracks prices on a wholesale level. The latest weekly initial jobless claims data is also due to be released Thursday.