U.S. Treasury yields inched lower on Wednesday as investors keenly awaited the consumer inflation reading and monitored the latest tariff news.
At 4:40 a.m. ET, the benchmark 10-year Treasury yield was over one basis point lower to 4.275%. The 2-year Treasury yield fell less than a basis point to 3.936%, after after falling to its lowest level since October on Tuesday morning.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
Investors are looking ahead to the consumer price index report which the Bureau of Labor Statistics will publish at 7:30 a.m. ET. It will be used as a key gauge for the health of the U.S. economy as investors worry about the impact of tariffs on inflation.
February’s core inflation, which excludes volatile food and energy prices, is expected to show an increase of 0.3% on a monthly basis and 3.2% on a yearly basis. Headline inflation is forecast to be at 2.9% on a yearly basis.
The producer price index is slated to be published on Thursday morning, which investors will also monitor.
The inflation reading comes as U.S. President Donald Trump’s 25% tariffs on steel and aluminum came into effect on Wednesday, with Europe imposing a counter-tariff on 26 billion euros ($28 billion) worth of U.S. goods from April in response.
Meanwhile, Trump announced earlier on Tuesday that he would double import duties on Canadian steel and aluminum imports to 50%, in response to Ontario’s decision to add a 25% levy on electricity exported to the U.S.
However, Ontario Premier Doug Ford later said he would temporarily suspend the 25% duty after speaking with U.S. Commerce Secretary Howard Lutnick. White House trade advisor Peter Navarro told CNBC Tuesday afternoon that Trump would not raise the Canadian steel and aluminum tariffs to 50%.
