US Yields Dip as Inflation Data Eases Rate Hike Bets
US Treasury yields dipped after inflation data showed lower-than-expected growth. The Personal Consumption Expenditures Price Index rose 0.3% in August, which eased bets on a Federal Reserve interest rate hike in October.
The Commerce Department's Bureau of Economic Analysis reported the index increase was less than expected, with core PCE inflation rising 3.0% year-on-year in August.
Luis Alvarado, co-head of global fixed income strategy at Wells Fargo Investment Institute, said core PCE came in lower than consensus expectations but didn't change the trend that consumers and businesses are feeling.
Short-dated bond yields initially fell after the data release, but the benchmark 10-year yield returned to pre-release levels. The 2-year note yield dropped 5.19 basis points to 4.837%.