10-year Treasury yield tumbles below 3.44% after producer prices decline by more than expected
U.S. Treasury yields fell on Wednesday as December's producer price index hinted that inflation may have reached its peak.
Treasurys
| TICKER | COMPANY | YIELD | CHANGE |
|---|---|---|---|
| US1M | U.S. 1 Month Treasury | 5.356% | +0.002 |
| US3M | U.S. 3 Month Treasury | 5.389% | UNCH |
| US6M | U.S. 6 Month Treasury | 5.361% | -0.016 |
| US1Y | U.S. 1 Year Treasury | 5.10% | -0.052 |
| US2Y | U.S. 2 Year Treasury | 4.741% | -0.078 |
| US10Y | U.S. 10 Year Treasury | 4.357% | -0.088 |
| US30Y | U.S. 30 Year Treasury | 4.518% | -0.075 |
The yield on the benchmark 10-year Treasury note dropped 14 basis points to 3.388%, its lowest level since September. The yield on the 30-year Treasury bond shed 9 basis points to 3.553%. Yields move inversely to prices.
The move in bond yields came as December's producer price index, which measures final demand prices across hundreds of categories, showed a larger-than-expected decline and signaled that inflation may be beginning to ease. Wholesale prices fell 0.5% for the month, while economists surveyed by Dow Jones had expected a 0.1% decline.
Uncertainty has abounded among traders in recent weeks as to whether the Federal Reserve will increase rates by 25 or 50 basis points at its next meeting on Jan. 31 and Feb. 1.
Many are concerned that the pace of the rate hikes implemented by the Fed so far in its fight against high inflation could drag the U.S. economy into a recession, and are hoping that the central bank will be able to further slow, or completely pause, its hiking cycle this year.
Four Federal Reserve officials are set to deliver speeches Wednesday: Atlanta Fed President Raphael Bostic, Philadelphia Fed President Patrick Harker, St. Louis Fed President Jim Bullard and Dallas Fed President Lorie Logan.