Rates are jumping on more strong inflation data; US 2-year yield hits 9-year high

  • The benchmark 10-year Treasury note yield hits a fresh high of 2.94 percent in early trading as inflation fears persist.
  • The 2-year Treasury yield hit a high of 2.213 percent, its highest level since September 2008, when the 2-year yielded as high as 2.217 percent.
  • Core PPI rose 2.5 percent in the 12 months through January, its largest increase since August 2014, according to the Labor Department.

U.S. government debt yields notched new highs Thursday amid of a slew of new economic data that provided more evidence of inflation pressure.

The 2-year Treasury yield hit a high of 2.213 percent, its highest level since September 2008, when the 2-year yielded as high as 2.217 percent. The yield on 10-year U.S. Treasury touched a fresh four-year high of 2.944 percent, above the levels which sparked a stock market sell-off in recent weeks.

The 5-year yield also hit a high, touching 2.687 percent, its highest level since April 2010 when the 5-year yielded as high as 2.702 percent.

The yield on the benchmark 10-year Treasury note slipped from its highs to 2.906 percent at 4:06 p.m. ET, while the yield on the 30-year Treasury bond was also off session highs at 3.155 percent. Bond yields move inversely to prices.

The rise comes amid inflation data, which showed that the producer price index increased 0.4 percent last month, with core PPI — excluding volatile food and energy prices — also up 0.4 percent, according to the Labor Department. The main PPI figure was above the 0.2 percent growth expectation of Wall Street economists.

Core PPI rose 2.5 percent in the 12 months through January, its largest increase since August 2014.

The producer price figures come a day after the Labor Department said the consumer price index increased 0.5 percent in January, against forecasts of a 0.3 percent rise — triggering a sharp reaction from domestic markets. Excluding volatile food and energy prices, the CPI was up 0.349 percent against estimates of 0.2 percent, the largest gain for the measure since March 2005.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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Meanwhile, the number of Americans filing for unemployment bounced back from a near 45-year low last week, but remained at levels associated with a tightening labor market, according to the Labor Department.

Initial claims for state unemployment benefits increased to a seasonally adjusted 230,000 for the week ended Feb. 10.

U.S. industrial production fell 0.1 percent in January versus a 0.2 percent increase expected by economists polled by Reuters.