Treasury yields tumble after April's CPI increase is less than feared
U.S. Treasury yields fell Wednesday after the latest CPI report showed inflation rose in April, albeit slightly less than expected.
The yield on the 2-year Treasury yield fell 11 basis points to 3.910%. The 10-year Treasury was down by 9 basis points to 3.437% and the yield on the 30-year Treasury yield was trading lower by 5.2 basis points at 3.796%.
Yields and prices move in opposite directions and one basis point is equivalent to 0.01%.
Treasurys
| TICKER | COMPANY | YIELD | CHANGE |
|---|---|---|---|
| US1M | U.S. 1 Month Treasury | 5.353% | UNCH |
| US3M | U.S. 3 Month Treasury | 5.387% | UNCH |
| US6M | U.S. 6 Month Treasury | 5.361% | UNCH |
| US1Y | U.S. 1 Year Treasury | 5.095% | UNCH |
| US2Y | U.S. 2 Year Treasury | 4.726% | UNCH |
| US10Y | U.S. 10 Year Treasury | 4.344% | -0.012 |
| US30Y | U.S. 30 Year Treasury | 4.506% | UNCH |
The consumer price index, which measures the cost of a broad swath of goods and services, increased 0.4% for the month, in line with estimates of economists surveyed by Dow Jones.
However, that equated to an annual increase of 4.9%, just below the estimate of 5%.
The CPI reading will be followed by April's wholesale inflation report on Thursday.
The figures could inform future Federal Reserve monetary policy decisions, especially regarding interest rates. After its rate-setting meeting last week, which saw the announcement of another 25 basis point rate hike, the Fed indicated that it may stop increasing rates soon.
On Tuesday, however, New York Fed President John Williams suggested that rates could go higher still if inflationary pressures do not ease. "We haven't said we're done raising rates," he said in prepared remarks at the Economic Club of New York.
That comes as concerns about elevated rates leading to an economic downturn spread among investors.