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Treasury yields fall as investors digest hot inflation data


U.S. Treasury yields fell on Thursday morning, as investors digested hotter-than-expected inflation data, released in the previous session.

The yield on the benchmark 10-year Treasury note dropped 7 basis points to 2.8407% at 4:25 a.m. ET. The yield on the 30-year Treasury bond moved 4 basis points lower to 2.9942%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

April’s consumer price index, released Wednesday, rose 8.3% year-on-year. That was higher than the anticipated 8.1% growth in inflation, but was below March’s 8.5% CPI reading.

The 10-year Treasury yield climbed back above 3% following the release of the report, but then eased back.

The latest inflation reading supports the Federal Reserve’s plans to more aggressively hike interest rates to combat persistent pricing pressures, fueling recession fears.

Bob Parker, investment committee member at Quilvest Wealth Management, told CNBC’s “Squawk Box Europe” on Thursday that the “risk of the global economy going into recession obviously is still an outside risk.”

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However, Parker believed the chances of a recession had risen from between 10% and 15% a few months ago, to close to 30%, with a 1-2 year time horizon.

“So if you call that stagflation, yes we have it,” he said.

On Thursday, April’s producer price index, which tracks wholesale inflation, is due to come out at 8:30 a.m. ET.

The number of jobless claims filed during the week ended May 7 is also slated for release at 8:30 a.m. ET.

Auctions are scheduled to be held on Thursday for $35 billion of 4-week bills, $30 billion of 8-week bills and $22 billion of 30-year bonds.



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