U.S. Treasury yields declined on Wednesday as investors digested January’s consumer price index report and looked ahead to further economic data and remarks from Federal Reserve speakers slated for the week.
At 4:52 a.m. ET, the 10-year Treasury yield was trading over three basis points lower at 3.7283%. The 2-year Treasury yield fell by just under three basis points to 4.5927%.
Yields and prices have an inverted relationship and one basis point is equivalent to 0.01%.
On Tuesday, the latest reading of the consumer price index, which tracks price changes for a range of goods and services, came in higher than expected and showed that inflation rose by 0.5% in January. The CPI increased by 6.4% from a year ago.
According to a Dow Jones survey, economists had previously expected the figures to rise by 0.4% on a monthly basis and 6.2% annually.
Speaking at the New York Bank Association after the release of the CPI report, New York Fed President John Williams suggested that the Fed’s battle with inflation was not yet over. Meanwhile, in a speech at Prairie View A&M University in Texas, Dallas Fed President Lorie Logan indicated that further interest rate hikes are on the cards.
The Fed has been hiking interest rates in an effort to cool the economy and ease inflation. Many investors are concerned about whether elevated rates could cause the U.S. economy to contract and are hoping that the central bank will pause rate hikes this year.
This report’s information was first seen on CNBC; to read more, click this link.
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