U.S. Treasury Yields Hold Steady as Investors Await Key Inflation Data

U.S. Treasury yields were little changed on Monday as markets turned their attention to crucial inflation data expected later this week. The benchmark 10-year Treasury yield inched up to 4.089%, while the 2-year yield hovered near 3.515%. The 30-year Treasury yield also remained steady at around 4.773%. Investors are treading carefully, with the results of August’s inflation report likely to determine the Federal Reserve’s next policy steps.

Analysts expect Thursday’s release of the core Consumer Price Index (CPI),which excludes food and energy prices, to show a 0.3% rise from July. A hotter-than-expected reading could signal that inflationary pressures remain persistent, potentially slowing the Fed’s pace of rate cuts. “Although the Fed is now on its media blackout, Wednesday’s PPI and especially Thursday’s CPI will shape pricing ahead of that, with all eyes still focused on the tariff impact,” Deutsche Bank economists noted.

Market watchers say the upcoming inflation numbers may fuel fresh debate over how quickly the Fed can ease monetary policy. Ed Yardeni, president of Yardeni Research, suggested that the data might confirm that underlying inflation pressures are still strong enough to complicate the Fed’s plans. Meanwhile, the Bureau of Labor Statistics will release revised employment figures on Tuesday, adding another layer of uncertainty to the week’s economic outlook.

Recent weeks have seen global bond markets under renewed pressure as investors weigh fiscal concerns and inflation risks. Long-dated bonds, in particular, have experienced sharp yield swings. Standard Chartered analysts, however, expect U.S. 30-year yields to stay within the 4.8% to 5.1% range unless inflation delivers a major surprise.

The pullback in yields late last week offered some relief after several dramatic milestones: Japan’s 30-year yield climbed to a record high, the U.K.’s 30-year surged to a 27-year peak, and the U.S. 30-year briefly pushed above 5% for the first time since July. For now, investors remain cautious, keeping their eyes on this week’s inflation data as the next decisive moment for financial markets

Source: cnbc