Bonds

Treasury yields dip as investors await jobs data

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Bonds yields dipped slightly on Wednesday, as investors digest last week's inflation data and look ahead to Friday's jobs report.

The yield on the benchmark 10-year Treasury note ticked 2.2 basis points lower to 1.593% by around 4:00 p.m. ET. The yield on the 30-year Treasury bond dipped 1.7 basis points to 2.279%. Yields move inversely to prices. One basis point is equal to 0.01%.

Treasurys

Inflation remains in focus after the release of the core personal consumption expenditures index — a key inflation gauge — last week. The core PCE rose 3.1% in April from a year earlier, hotter than expected. Gold, which often is used as an inflation hedge, is still holding above a key level of $1,900.

The Federal Reserve's Beige Book published on Wednesday reported businesses are facing rising costs, particularly on goods used to make their products. The Fed also found that firms are offering higher wages and other incentives to lure employees back to work.

The average 30-year mortgage interest rate decreased to 3.17% from 3.18% last week, the Mortgage Bankers Association said Wednesday.

On Tuesday, Federal Reserve Governor Lael Brainard told the Economic Club of New York that the mismatch between supply and demand in some industries was temporary, and that the central bank's goal was "to ensure that inflation expectations are strongly anchored at 2%," according to the club's Twitter account.

Investors are also eyeing Friday's jobs report. Economists expect the data to show the creation of around 674,000 jobs in May, after April's read came in below expectations at 266,000.

The Fed is set to convene for its next Federal Open Market Committee meeting June 15-16.

Negotiations in Washington over an infrastructure spending package remain in focus, as Democrats discuss plans to 'go it alone' with a sweeping spending package, after Senate Republicans presented a $928 billion counteroffer to President Biden on Thursday, well below the White House's latest $1.7 trillion proposal.

Transportation Secretary Pete Buttigieg said Sunday that Senate Democrats and Republicans must establish a clear direction on infrastructure by June 7.