Treasury yields slip after wholesale prices report comes in less than expected

Treasury yields fell on Tuesday as markets after October's producer price index figures came in less than expected, further confirming to investors that inflation may be easing.

The yield on the benchmark 10-year Treasury note fell about 7 basis points to 3.792%, its lowest level since the beginning of October. The 2-year Treasury yield was last lower by about 4 basis points at 4.363%.

Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.


The latest PPI figures showed wholesale prices rise 0.2% in October, less than the 0.5% increase expected by Dow Jones. Year over year, PPI rose 8% compared to an 8.4% increase in September.

The data further indicated to investors that inflation is likely cooling after solid consumer inflation figures last week hinted at that. The PPI reflects wholesale inflation by measuring how prices paid to producers for goods and services develop.

Fed Governor Christopher Waller suggested on Monday that last week's data was only part of the bigger picture and other data points would have to be considered before drawing any conclusions.

He also indicated that the Fed would consider slowing rate hikes, but a pause to them is not imminent.

Federal Reserve Vice Chair Lael Brainard also hinted at a potential slowdown of rate hikes in remarks made on Monday.

Investors have been following Fed speaker comments closely as uncertainty about the central bank's future policy and concerns about the pace of rate hikes leading the U.S economy into a recession have continued.

—CNBC's Samantha Subin contributed reporting