NEW YORK- US Treasury yields rose moderately on Tuesday in choppy trading, as investors awaited key inflation data due out on Thursday for more clarity on when the Federal Reserve could start cutting interest rates.
US yields, which move inversely to prices, earlier fell after a seven-year note auction that showed stable demand for this maturity. US seven-year yields were last up 1.2 basis points (bps) at 4.342 percent
Investors now look to the personal consumption expenditures price index (PCE) for January, the Fed’s preferred inflation measure.
The PCE is expected to have risen 0.3 percent on a monthly basis in January, up slightly from the 0.2 percent increase seen in December, a Reuters poll showed. On a year-on-year basis, PCE is likely to have gained 2.4 percent , compared with a 2.6 percent advance the previous month.
Tuesday’s mostly weaker-than-expected US data weighed on yields earlier, as it supported the view that the Fed would cut rates by the summer or later in the year. The report moved the rates market a little bit, but the impact was brief.
“To the extent that inflation remains a little sticky and employment continues to hold up and support the consumer, the notion of more rate cuts is not going to happen,” said Greg Faranello, head of US rates strategy at AmeriVet Securities in New York. – Reuters
