Analytics Economy USA World

Treasury Yields Climb as Investors Anticipate Inflation Reports After Weak Jobs Data

Treasury Yields Climb as Investors Anticipate Inflation Reports After Weak Jobs Data
  • PublishedSeptember 9, 2024

Treasury yields edged higher on Monday as investors turned their focus to upcoming inflation reports, following a series of weaker-than-expected economic data releases from the US last week, CNBC reports.

The yield on the benchmark 10-year Treasury note rose by 3 basis points to 3.738%, while the 2-year Treasury yield increased by 4 basis points to 3.689%. Yields move inversely to bond prices, and one basis point equals 0.01%.

This week’s key data releases include the August Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday. These inflation figures are likely to influence investor sentiment and expectations for future Federal Reserve actions.

Treasury yields fell last week after both nonfarm and private payroll reports came in below expectations, fueling concerns about a potential slowdown in the US economy. Despite the softening labor data, the unemployment rate dipped to 4.2%, in line with forecasts.

As investors assess the broader economic outlook, they are also closely monitoring the Federal Reserve’s next monetary policy meeting on September 18. According to the CME Group’s FedWatch Tool, markets currently see a 71% chance of a 25-basis-point rate cut, with a 29% probability of a larger 50-basis-point cut. Last week’s disappointing data pushed the likelihood of a more significant rate cut closer to a 50-50 split at one point, contributing to a decline in stock markets.