Treasury yields climb after CPI report shows slowing inflation ahead of Fed decision
U.S. Treasury yields climbed Tuesday after a key inflation report showed price increases slowing, potentially bolstering the case for the Federal Reserve to skip a rate hike this week.
The 10-year Treasury yield added 7 basis points to 3.835%. The 2-year Treasury yield was trading higher by 10 basis points at 4.698%.
Yields and prices have an inverted relationship and one basis point equals 0.01%.
Treasurys
| TICKER | COMPANY | YIELD | CHANGE |
|---|---|---|---|
| US1M | U.S. 1 Month Treasury | 5.353% | UNCH |
| US3M | U.S. 3 Month Treasury | 5.399% | +0.004 |
| US6M | U.S. 6 Month Treasury | 5.39% | +0.008 |
| US1Y | U.S. 1 Year Treasury | 5.205% | +0.04 |
| US2Y | U.S. 2 Year Treasury | 4.95% | +0.072 |
| US10Y | U.S. 10 Year Treasury | 4.494% | +0.06 |
| US30Y | U.S. 30 Year Treasury | 4.597% | +0.047 |
The May consumer price index showed an annual increase of 4.0%, the lowest since 2021, and just 0.1% month over month. So-called core inflation, which strips out volatile food and energy prices, was hotter with 5.3% annual increase and 0.4% monthly change.
The CPI results were in line with the Dow Jones consensus estimates.
The data comes just as the Fed is starting a two-day policy meeting. Traders expect the central bank to hold rates steady on Wednesday after hiking rates for more than a year.
Traders were pricing in more than a 90% chance of no rate hike this week after the CPI report, according to CME Group's FedWatch tool.