U.S. Treasury yields fell ahead of the release of producer price data
Yields on U.S. Treasury bonds fell on the morning of August 13, as Wall Street traders assessed July’s consumer inflation data and awaited the release of the Producer Price Index (PPI). This was reported by CNBC.
The yield on 10-year U.S. Treasury bonds, a key benchmark for government borrowing costs, fell by more than one basis point to 4.674%. The yield on 2-year Treasuries, which is more closely tied to the Federal Reserve’s short-term policy, fell by more than two basis points to 4.176%.
The yield on 30-year bonds fell by about one basis point to 5.236%. One basis point equals 0.01%. Bond prices and their yields move in opposite directions.
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The release of the July U.S. Producer Price Index was scheduled for 8:30 a.m. Eastern Time. The index reflects the prices wholesalers pay for raw materials and supplies. Economists surveyed by Dow Jones expected it to rise by 0.2% on a monthly basis.
The day before, the U.S. released data on the Consumer Price Index: in July, it rose by 0.1% compared to June, in line with forecasts. Following this, traders scaled back their bets on a Fed rate hike in September.
Analysts at Goldman Sachs noted that most members of the Fed’s Open Market Committee may consider the expected July inflation figures acceptable and will likely want to see the August CPI and PPI data before deciding on a possible rate hike at the September meeting. Jim Reid of Deutsche Bank also attributed the reduced pressure on the Fed to two consecutive relatively favorable reports on core inflation and weaker labor market data from the previous week.
