U.S. Treasury yields were lower on Thursday after another June inflation print came in cooler than expected, reducing the likelihood of more aggressive interest rate hikes from the Federal Reserve.
Treasurys
The yield on the benchmark 10-year Treasury note slid by almost 10 basis points to 3.763%. Meanwhile, the yield on the 2-year fell by more than 11 basis points to 4.626%.
Week to date, the 2-year yield is down by about 27 basis points. Yields move inversely to prices.
Investors turned their attention Thursday to the June producer price index which showed a weaker-than-expected rise of 0.1%. Economists polled by Dow Jones anticipated a 0.2% increase last month. Core PPI, which excludes food and energy prices, was also lower than expected at 0.1%.
That follows Wednesday's consumer price index data, which came in at an annualized 3% for June. That's the lowest level since March 2021 and below consensus expectations.
Fed officials have reiterated that the battle against inflation is far from over, and the market is broadly pricing in a quarter-point interest rate hike at the central bank's next meeting later this month.
However, the signal that inflation is meaningfully returning to earth was a welcome sign for risk assets, prompting a rally in stock markets around the world. Veteran economist Steve Hanke told CNBC's "Street Signs Asia" on Thursday that the inflation problem is "history" in the United States.