After March inflation tops estimates, the 10-year Treasury yield jumps back above 4.5%

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The 10-year Treasury yield jumped back above 4.5% on Wednesday after March inflation data came in hotter than expected, adding to the likelihood of higher-for-longer interest rates from the Federal Reserve.
The yield on the 10-year Treasury was last higher by more than 14 basis points at 4.509%.
The yield on the 2-year Treasury was last at 4.933% after climbing more than 18 basis points.
Yields and prices move in opposite directions, and one basis point is equivalent to 0.01%.
The March consumer price index that came out Wednesday showed a reacceleration of inflation from the prior month.
Core CPI, which excludes volatile food and energy prices, jumped 0.4% on a monthly basis while rising 3.8% from a year ago.
“That’s now turning into a double-edged sword, making inflation stickier than we hoped.
The latest consumer inflation report comes ahead of the March producer price index set to be released on Thursday.

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The likelihood of higher-for-longer interest rates from the Federal Reserve increased when March inflation data came in hotter than anticipated, sending the yield on the 10-year Treasury note surging back above 4 percent on Wednesday.

The 10-year Treasury yield last stood at 4.509 percent, up more than 14 basis points. The yield on the 2-year Treasury increased by more than 18 basis points to 4 points933 percent at the last check.

Prices and yields move in different directions, and a basis point is equal to 0.01% of a percentage.

The consumer price index for March, which was released on Wednesday, indicated that inflation had resumed its previous pace of increase. The CPI increased by 0.4 percent from February and by 3.5 percent annually. A 3 point 4 percent increase from the prior year was anticipated by economists surveyed by Dow Jones, with a gain of 0 point 3 percent.

The core CPI increased 0.4 percent on a monthly basis and 30.8 percent from a year ago. The core CPI does not include volatile food and energy prices. In contrast, those figures are estimated to be 0.33% and 3.7 percent, respectively.

As more recent data indicated a strong economy preventing annual price gains from easing back to the central bank’s 2 percent target, persistent inflation heightens expectations the Fed may delay cutting interest rates as early as June.

“Everyone was hoping that the cost of housing would decrease, but they aren’t helping. We have a robust economy with low inventories and competitive pricing for businesses,” stated David Russell, TradeStation’s global head of market strategy. It’s now becoming a double-edged sword, sticking inflation higher than we had anticipated. Rate reductions might not be possible. “.”.

Also scheduled for release on Wednesday are the minutes from the most recent meeting of the Federal Reserve, which will offer more perspectives into the expectations of decision-makers regarding the economy and monetary policy.

Prior to the release of the March producer price index on Thursday, there is a new report on consumer inflation.

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