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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.

Credit Suisse predicts main market will recover as inflation 'collapses'

– CNBC’s Patti Domm and Natasha Turak contributed reporting.



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