US 10-Year Yield Holds Up on Hot PPI

The yield on the 10-year US Treasury note held above 4.27% on Friday, after climbing about 5 basis points in the prior session as hotter-than-expected wholesale inflation dampened expectations for a supersized half-point Federal Reserve rate cut in September. July’s Producer Price Index surged 0.9% month-over-month, the largest increase in three years and far above the 0.2% forecast, while rising 3.3% year-over-year. Markets still see over a 90% probability of a 25-basis-point cut next month, but odds of a larger 50 bps move have been priced out. Investors now await fresh data on import prices, consumer sentiment, and retail sales, while next week’s Jackson Hole central banking symposium is seen as a key event for policy signals.