10-year Treasury yield inches higher as investors await latest inflation data
The U.S. 10-year Treasury yield rose slightly on Monday as investors looked ahead to key inflation data for insights into the state of the economy.
The yield on the 10-year Treasury increased by more than 1 basis point to 4.098%. The 2-year Treasury yield climbed by around 5 basis points, sitting at 4.536%.
Yields and prices have an inverted relationship. One basis point equals 0.01%.
Treasurys
| TICKER | COMPANY | YIELD | CHANGE |
|---|---|---|---|
| US1M | U.S. 1 Month Treasury | 5.37% | +0.009 |
| US3M | U.S. 3 Month Treasury | 5.396% | UNCH |
| US6M | U.S. 6 Month Treasury | 5.389% | -0.001 |
| US1Y | U.S. 1 Year Treasury | 5.211% | +0.008 |
| US2Y | U.S. 2 Year Treasury | 4.948% | +0.015 |
| US10Y | U.S. 10 Year Treasury | 4.467% | -0.008 |
| US30Y | U.S. 30 Year Treasury | 4.573% | -0.007 |
Fresh inflation data is expected this week in form of the consumer price index for February on Tuesday and the producer price index on Thursday. Last month's CPI and PPI readings came in hotter than expected, indicating persistent inflation and sparking concerns about the outlook for rate cuts.
"Super robust data is what's going to affect the interest rate decision," said Shelby McFaddin, investment analyst at Motley Fool Asset Management. "On the one hand, you would sort of expect the market to favor things that win from a robust consumer. But on the other hand, you have another side of the market that loses if the consumer is so robust that rates are held and/or go up again."
Economists polled by Dow Jones anticipate CPI will rise 0.4% between January and February and 3.1% on an annualized basis. For PPI, the consensus forecast is for an increase of 0.3% month over month.
That comes after Friday's release of the closely watched jobs data for February. Nonfarm payrolls rose more than expected, showing that the U.S. economy added 275,000 jobs in February, more than the Dow Jones estimate of 198,000.
The unemployment rate, however, rose to 3.9%, coming in higher than January's 3.7% reading which economists surveyed by Dow Jones had expected to remain unchanged in February.
Investors widely took the data as a sign that interest rate cuts from the Federal Reserve are on the table for this year. But when they will take place and how many cuts there will be in 2024 remains uncertain.
Fed Chairman Jerome Powell last week indicated that there is likely not much longer to go before policymakers are convinced that rate cuts are appropriate. However, the Fed is still awaiting more evidence that the economy is easing and that inflation is moving toward the 2% target range.