NEW YORK- US Treasury yields dipped on Wednesday, with the benchmark 10-year note yield down for a third-straight session as investors dialed in expectations for the path of interest rates ahead of data on consumer strength.
The 10-year yield had risen four straight weeks, reaching 4.12 percent last week, its highest since July 31, in the wake of a strong payrolls report that diminished expectations for another outsized rate cut of 50 basis points from the Fed at its November policy meeting.
Labor Department data on Wednesday showed import prices slipped 0.4 percent last month, the biggest drop since December 2023, after a revised 0.2 percent decrease in August, amid a sharp decrease in the cost of energy products and indicating a benign inflation outlook that keeps the Fed on course to continue cutting interest rates.
The data comes ahead of retail sales figures on Thursday that will provide insight on the health of the consumer.
“Most likely if they come around expectations, it’s supportive of a still resilient and strong consumer, so not pointing to the need for super-fast rate cuts,” said JoAnne Bianco, BondBloxx partner and client portfolio manager in Chicago.
“We translate this into our view of where we think value is in the markets and we think the backup in yields that we’ve seen really has represented an opportunity for investors to increase their allocation to fixed income.”
