U.S. Treasury yields moved lower on Wednesday as investors awaited further inflation data and considered the impact of tariffs on consumer prices.
At 5:24 a.m. ET, the 10-year Treasury yield was down one basis point to 4.447%, while the 30-year yield also declined a basis point to 5.009%. The 2-year Treasury yield was less than a basis point lower at 3.95%.
Investors are anticipating more inflation data on Wednesday, as the producer price index for June is set to be released at 8:30 a.m. ET, and is expected to show a 0.2% increase on a monthly basis, according to Dow Jones estimates.
That comes after the consumer price index came in as expected on Tuesday, with core CPI, which excludes food and energy prices, rising 0.2% on a monthly basis and 2.9% on a yearly basis. The monthly change was just less than expected, while the yearly move matched a Dow Jones consensus.
“Inflation has started a slow climb as signs of tariff-induced inflation are now evident within durable and nondurable imports,” said Joe Brusuelas, chief economist at RSM U.S. “That prompts an important question: Will service and housing inflation, which is easing but still elevated, cool further to offset what will be a more pronounced increase in durable and nondurable goods?”
“Our sense is that the Federal Reserve will continue to display patience as the direction of inflation evolves,” he added.
Investors are also monitoring the impact of President Donald Trump’s tariffs on the U.S. economy. Trump announced 30% tariffs on Mexico and the European Union over the weekend, set to start from Aug. 1. He also announced on Tuesday that the U.S. had reached a trade deal with Jakarta, with a 19% tariff on its exports to the U.S.
— Brian Evans contributed to this report
