Yields on 2-year Treasury notes above 3.79%, highest since 2007
U.S. Treasury yields edged higher on Tuesday as investors bet that hot inflation will keep the Federal Reserve aggressive in tightening monetary policy.
Productivity per Treasury 2 years, the part of the curve that is most sensitive to Fed policy, rose more than 17 basis points to 3,748%. Yields rose to 3.794% at one point, their highest level since November 2007. Yield fluctuates inversely to price and by 0.01% basis point.
Meanwhile, the yield on the benchmark 10-year Treasury bond up 6 basis points to trade at 3.42%. Productivity per The 30-year Treasury note is increased for most of the day before dropping 2 basis points to 3.492%.
Consumer price index up 0.1% in the month and 8.3% in the past year. Economists had expected inflation to fall 0.1% month-on-month, according to Dow Jones estimates. The full year estimate is 8%.
Energy prices fell 5% for the month, leading to a 10.6% drop in the gasoline index. However, those declines were offset by increases elsewhere.
“We see the battle between regulated goods and services still going strong. It’s not a war. Both are moving forward,” said Nomura economist Rob Dent. “For now, I think the Fed is going to look at this with a lot of concern. It’s not good news in this report,” he said.
According to the tool of CME FedWatch, according to the tool of CME FedWatch.
– CNBC’s Patti Domm and Natasha Turak contributed reporting.