U.S. Treasury Yields Rise as Investors Assess Key Inflation Data
U.S. Treasury yields saw an increase on Tuesday, with the 10-year Treasury yield rising by 4 basis points to 4.139% and the 2-year Treasury yield gaining 4.8 basis points to 4.58%. Investors were closely watching key inflation data, including the February consumer price index, which showed a 0.4% increase for the month and a 3.2% increase from the year-ago period, in line with expectations.
The Core CPI, which excludes food and energy prices, also saw an increase of 0.4% on a monthly basis and 3.8% year over year, surpassing economists’ expectations. While inflation appears to be moderating slightly, it remains above the Federal Reserve’s 2% target, leading to speculation that the Fed may delay any interest rate cuts until later in the year.
Federal Reserve Chairman Jerome Powell recently indicated that rate cuts could be on the horizon, but emphasized that the central bank is monitoring economic data to ensure that inflation is returning to the target level. The upcoming release of February’s producer price index will provide further insight into the state of inflation before the Fed’s two-day policy meeting next week.
Overall, the cautious approach by the Fed in response to inflation data has created an atmosphere of uncertainty among investors. Many will be eagerly awaiting the outcome of the upcoming policy meeting to gain more clarity on the central bank’s strategy moving forward. Stay tuned to Poh Diaries for further updates on this developing story.
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