Treasury yields were little changed on Tuesday as investors looked to the release of key inflation data amid uncertainty about the state of the U.S. economy.
At 2:49 a.m. ET, the yield on the 10-year Treasury was up by less than one basis point to 3.9150%. The 2-year Treasury yield was last less than one basis point higher to 4.0188%.
Yields and prices move in opposite directions. one basis point equals 0.01%.
Two key inflation reports are due this week, with the first, producer price index, due on Tuesday. The PPI is expected to reflect a 0.2% increase in July, which would be in line with June’s reading, according to a Dow Jones consensus estimate.
The wholesale inflation figures will be followed by the consumer price index on Wednesday.
Investors will be watching both sets of data closely for hints about the state of the economy, especially as concerns about whether the U.S. could be entering a recession have caused market jitters in recent weeks.
The data could also provide hints about whether the Federal Reserve is likely to cut interest rates when it meets in September. At its July meeting, the central bank left rates unchanged, but indicated that depending on how inflation and the labor market develop, a cut could come in September.
Following recent market turmoil and economic uncertainty, questions have also emerged about whether the Fed should have already started cutting rates to avoid a hard landing. Markets are widely expecting a September rate cut, but traders have appeared split on how big they expect the cut to be.
