Treasury yields rise as investors digest inflation data, assess Fed policy outlook
The yield on U.S. Treasurys climbed on Friday as investors digested higher-than-expected wholesale inflation figures and considered what that could mean for Federal Reserve policy moves.
At 5:32 a.m. ET, the yield on the 10-year Treasury was up by more than 5 points to 3.902%. The 2-year Treasury yield was trading at 4.69% after climbing by more than 7 basis points.
Yields and prices have an inverted relationship and one basis point is equivalent to 0.01%.
Thursday’s producer price index reading for January came in higher than expected, causing investors to fret about inflationary developments and upcoming Fed monetary policy decisions.
Wholesale prices increased by 0.7% on a monthly basis in January after having declined by 0.5% in December. Economists previously surveyed by Dow Jones had expected January’s PPI to rise by 0.4%.
Data released earlier this week showed that consumer inflation rose by 0.5% in January, which was also a larger-than-expected increase.
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