Yield Relief: Inflation Data Eases Treasury Pressure

The US bond market saw some relief on Wednesday after inflation data for August was reported to be lower than expected. The Consumer Price Index (CPI) rose 3.4% year-over-year, missing economists' predictions of a 3.7% increase.

As a result, Treasury yields retreated slightly, with the 10-year yield falling to 5.24% from 5.26% on Tuesday. This in turn helped stabilize US stocks, with the S&P 500 rising 0.3%, the Dow Jones Industrial Average up 78 points or 0.2%, and the Nasdaq composite gaining 0.4%.

The better-than-expected inflation data tempered expectations of a Fed rate hike next month, with traders now seeing less than a coin flip's chance of that happening, according to CME Group data.