2-year Treasury yield dips ahead of inflation data
The yield on the policy-sensitive 2-year Treasury note dropped on Wednesday as markets awaited the release of September’s producer price index inflation figures, which are likely to affect future Federal Reserve policy and interest rate hikes.
September producer price index data, which measures wholesale prices of goods, is expected on Wednesday. Investors will look at the numbers for signs of whether the Federal Reserve’s interest rate hikes are working as a measure to throttle persistent inflation. In recent weeks, Fed speakers have said they are not satisfied with the development of inflation and will not shy away from hiking interest rates further to change this.
The yield on the policy-sensitive 2-year Treasury note dropped on Wednesday as markets awaited the release of September’s producer price index inflation figures, which are likely to affect future Federal Reserve policy and interest rate hikes . The 2-year Treasury dropped by 2 basis points to 4.2953% at around 4:30 a.m. ET. The benchmark 10-year Treasury held steady and was last trading at 3.9289%, down by a basis point. Yields and prices have an inverted relationship and one basis point is equivalent to 0.01%. September producer price index data , which measures wholesale prices of goods, is expected on Wednesday . Investors will look at the numbers for signs of whether the Federal Reserve’s interest rate hikes are working as a measure to throttle persistent inflation . Based on a survey of economists conducted by Dow Jones, analysts are anticipating the PPI to inch higher. In recent weeks, Fed speakers have said they are not satisfied with the development of inflation and will not shy away from hiking interest rates further to change this. Concerns that the central bank is dragging the U.S. into a recession have grown louder in response. The Fed’s September meeting minutes are also set to be released on Wednesday . Bond markets are also contending with mixed messages from the Bank of England regarding its emergency bond-buying program and whether this could be extended beyond its original end date this Friday. The program was implemented to stabilize the British pound in late September after a new U.K. budget sent the country’s economy into turmoil.
