Treasury yields fall even after stronger-than-expected jump in inflation
The yield on the benchmark 10-year Treasury note dropped 2.1 basic points to 1.589% at 12:05 p.m. ET. The yield on the 30-year Treasury bond ticked 2.3 basic points lower to 2.267%. Yields move inversely to prices. One basis point equal 0.01%.
April's core personal consumption expenditures price index, a key measure of inflation, rose 3.1%, hotter than expected. The PCE was expected to have increased 2.9% in April year-over-year, according to economists polled by Dow Jones.
While the gauge came in hot, it was not as worrisome as some market participants feared. Investors have been keeping tabs on inflation data, as the Fed has said it will let it run hotter, arguing that any rising price pressures are "transitory."
The 10-year rate rose to top 1.6% in the previous session, as the number of weekly jobless claims filed last week came in lower than expected. The U.S. Department of Labor said there were 406,000 initial jobless claims last week, below the 425,000 forecasted by economists polled by Dow Jones.
Unemployment data has been closely monitored by investors, given that Federal Reserve is seeking a fuller recovery in the labor market before considering tightening monetary policy.
