U.S. Treasury yields surged on Thursday as traders reacted to a hotter-than-expected wholesale inflation report, fueling concerns about its potential implications for Federal Reserve policy decisions.
The 10-year Treasury note saw yields climb approximately 11 basis points to 4.298%, while the 2-year Treasury yield reached 4.69%, up around 6.5 basis points.
Yields move inversely to prices, with one basis point equaling 0.01%.
U.S. Treasury yields climb on hotter-than-expected inflation data, stoking concerns about Federal Reserve policy ahead of pivotal meeting.
The producer price index rose 0.6% in February, with core PPI, excluding food and energy, increasing by 0.3%. Economists surveyed by Dow Jones had projected a 0.3% rise for the headline figure and a 0.2% advance for the core PPI.
This data release precedes the Fed’s meeting on March 19-20. While interest rates are expected to remain unchanged, investors await clues about potential rate cuts and their frequency throughout the year.
Policymakers emphasize the need for evidence that inflation is nearing the central bank’s 2% target range before altering monetary policy.
Before the Federal Reserve’s upcoming meeting on March 19-20, investors are closely monitoring economic indicators for insights into potential shifts in monetary policy.
This sentiment follows a slightly higher-than-anticipated consumer price index for February, which recorded a 0.4% monthly increase and a 3.2% rise year-on-year.
