US 10-Year Yield Steadies Ahead of Inflation Data

The yield on the 10-year US Treasury note held near 4.08% on Wednesday after touching a five-month low earlier in the week, as investors awaited key inflation releases that could influence the Federal Reserve’s policy outlook. The producer price index is due later today, followed by the consumer price index on Thursday. On Tuesday, the Bureau of Labor Statistics said the economy likely added 911,000 fewer jobs in the 12 months through March, or about 76,000 fewer per month, indicating a weaker labor market than previously thought. Together with last week’s disappointing August jobs report, the data reinforced expectations for a 25 basis point Fed rate cut next week, though some traders are betting on a larger 50 basis point move. In total, markets are pricing in 66 bps of easing this year.