U.S. Treasury yields inched lower Monday as investors look ahead to key inflation data due this week which will offer fresh insights about the state of the U.S. economy.
The 10-year Treasury yield was down over 1 basis point to 4.269%, and the 2-year Treasury yield was unchanged at 3.76%. The 30-year Treasury bond yield shed 2 basis points to 4.834%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
Investors are expecting a busy week of economic data relations with key inflation prints out this week. The consumer price index, set to be released Tuesday morning, and the producer price index, out on Thursday, will be critical to shaping the Federal Reserve’s interest rate decisions at its September meeting.
Economists are forecasting the July CPI to show a 0.2% increase on a monthly basis and 2.8% increase annually, per Dow Jones. Core CPI, excluding volatile food and energy prices, is expected to rise 0.3% on a monthly basis, and 3.1% yearly — up from June’s figures of 0.2% and 2.9% respectively.
The PPI is expected to show a 0.2% monthly gain and 0.3% for core PPI, after both were flat in June.
The inflation data comes ahead of a Fed meeting in Jackson Hole in Wyoming, from Aug. 21-23, which will likely influence the direction of the September meeting.
“The most important thing is the CPI data,” Jay Woods, chief global strategist at Freedom Capital Markets said. “That will definitely dictate monetary policy.”
Retail sales data for July and the preliminary Michigan consumer sentiment reading are also due later in the week.
