US Treasury yields rose slightly on Wednesday morning, following slightly higher-than-expected inflation in the previous session.
The yield on the benchmark 10-year Treasury bill climbed to 1.634% at 4:20 a.m.ET. The yield on the 30-year government bond rose to 2.314%. Revenues move inversely with prices.
The Labor Department reported on Tuesday that the consumer price index, a core measure of inflation, rose 0.6% in March from the previous month. However, consumer prices are up 2.6% from the same period last year, the highest year-on-year increase since August 2018 and much higher than the 1.7% growth reported in February.
Yields fell following the release of the data, despite market concerns about inflation that has pushed interest rates up in recent months. Yields were also lower after a strong auction of 30-year bonds, according to a Reuters report.
Hugh Gimber, global market strategist at JPMorgan Asset Management, told CNBC’s “Squawk Box Europe” on Wednesday that growth and inflation data was now changing from “predicted to fact”.
He said Tuesday’s inflation data was the first of a “wave of very strong data that will continually test the Fed’s decision to hold on to its promise to look at what will be a soaring rise in inflation in the coming months. . “
Gimber therefore believed that there was still room to allow government bond yields to rise further.
Federal Reserve Chairman Jerome Powell will discuss the economic recovery from the pandemic Wednesday at The Economic Club of Washington at 12 p.m. ET.
Fed Chairman Richard Clarida will speak at the Shadow Open Market Committee meeting at 3:45 PM ET on the new framework and the central bank’s results-oriented outlook.
An auction will be held Wednesday for $ 35 billion in 119-day bonds.