US Treasury yields rose slightly on Wednesday morning after inflation was slightly above expectations in the previous session.
The benchmark 10-year Treasury note yield rose to 1.634% at 4:20 a.m. ET. The yield on the 30-year government bond rose to 2.314%. The returns move inversely to the prices.
The Labor Department reported Tuesday that the consumer price index, a key measure of inflation, rose 0.6% in March from the previous month. However, consumer prices rose by 2.6% compared to the same period last year. This was the highest year-on-year increase since August 2018 and was well above the 1.7% growth recorded in February.
Yields fell after the data was released, despite market concerns over inflation driving interest rates higher in recent months. Yields were also lower after a heavy 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 is now changing from “forecast to fact”.
He said Tuesday’s inflation data was the first in a “wave of very strong data that is continually testing the Fed’s determination to hold on to its commitment to see what will lead to a sharp spike in inflation over the next few months.” will put “.
Gimber therefore believed that government bond yields could continue to rise.
Federal Reserve Chairman Jerome Powell will speak about the economic recovery from the pandemic at the Economic Club of Washington on Wednesday at 12:00 noon (CET).
Fed chairman Richard Clarida is expected to speak at 3:45 p.m. CET at the Shadow Open Market Committee meeting on the central bank’s new framework and results-oriented guidance.
An auction for 119-day bonds valued at $ 35 billion will take place on Wednesday.
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