U.S. Treasury yields fell slightly on Tuesday as investors awaited fresh inflation data and looked to remarks from Federal Reserve policymakers.
At 4:45 a.m. ET, the yield on the 10-year Treasury was down by less than one basis point to 4.4747%. The 2-year Treasury yield was last at 4.8400% after falling by over one basis point.
Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.
Investors looked to fresh key economic data and comments from Federal Reserve officials, scanning them for hints about the path ahead for monetary policy.
April’s producer price index, which tracks inflation on a wholesale level, is due out Tuesday. Economists surveyed by Dow Jones are expecting the PPI to have risen 0.3% from the previous month.
This is the first of two key inflation reports slated for the week, with the consumer price index for April being expected Wednesday. According to a Dow Jones survey, economists are anticipating it will reflect a 3.4% increase from a year ago and a 0.4% rise on a monthly basis.
That comes after the Fed said at its last meeting that there been “a lack of further progress” on inflation returning to its 2% target. Policymakers have also repeatedly said that they are looking to data for evidence about inflationary pressures cooling before they feel ready to cut interest rates.
The data could therefore affect investor expectations about when rates may be cut and how many cuts could come this year — should the CPI and PPI suggest inflation is cooling, expectations for rate cuts may grow, and vice versa.
More Fed officials, including Chair Jerome Powell, are also slated to speak this week and may provide fresh insights about the monetary policy outlook.
