US Treasury yields rose slightly on Wednesday morning, following a slightly higher-than-expected inflation reading in the previous session.
The yield on the 10-year Treasury benchmark rose to 1.634% at 4:20 a.m. ET. The yield on the 30-year treasury bond rose to 2.314%. Yields move in the opposite direction to prices.
The Labor Department reported on Tuesday that the consumer price index, a central measure of inflation, rose 0.6% in March from the previous month. However, consumer prices increased by 2.6% compared to the same period last year, the largest year-on-year gain since August 2018 and much higher than the 1.7% increase reported in February.
Yields have declined following the release of the data, despite market concerns about inflation, which have led to rising rates in recent months. Yields were also lower following a strong 30-year bond auction, 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 are now changing from “forecast to fact”.
He said Tuesday’s inflation data was the first in a “wave of very strong data that will continually test the Fed’s determination to stick to its commitment to look at what will be a sharp rise in inflation over the next few months.” ”.
Therefore, Gimber believed that there were still possibilities for Treasury yields to continue to rise.
Federal Reserve Chairman Jerome Powell will discuss the economic recovery from the pandemic Wednesday at 12 pm ET at the Washington Economic Club.
Fed Chairman Richard Clarida should talk about the new central bank framework and direct results-based guidelines at 3:45 p.m. ET at the Shadow Open Market Committee meeting.
A $ 119 billion, $ 35 billion bond auction will be held on Wednesday.