U.S. Treasury yields climbed on Monday as investors considered the outlook for the economy and looked ahead to fresh data and comments from Federal Reserve officials.
At 4:58 a.m. ET, the yield on the 10-year Treasury was up by over six basis points to 4.5605%. The 2-year Treasury yield was last more than five basis points higher to 4.9333%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
Investors considered the path ahead for the economy and monetary policy following the latest inflation data and looked to fresh economic reports due in the week ahead.
Last week’s consumer price index and producer price index painted a somewhat mixed picture, with the CPI coming in higher than expected and the PPI rising by less than anticipated. That came as questions about the outlook for the economy as well as Federal Reserve monetary policy and especially interest rate cuts were already widespread.
Market expectations about when the first rate cut will take place moved back following the data, with traders now anticipating the first rate cut to come in July or September rather than June, CME Group’s FedWatch tool showed.
In the week ahead, investors will be looking to economic data for fresh hints about the state of the economy. That includes retail sales figures on Monday, as well as building permit, housing starts and existing home sales data later in the week.
Various Fed policymakers are also expected to give remarks, which investors will be scanning for clues about the monetary policy outlook.
Investors also considered the potential market impact of growing tensions in the Middle East after Iran launched several hundred missiles and drones on Israel over the weekend.
