Treasury yields slid on Monday as investors look toward key inflation data due later in the week.
The benchmark 10-year Treasury yield fell more than 4 basis points to 4.044%. The 2-year Treasury yield was more than 1 basis point lower at 3.495%. The 30-year Treasury yield dropped more than 8 basis points to 4.689%.
One basis point equals 0.01% and yields and prices move in opposite directions.
Investors will be keeping a close eye on core inflation data coming out on Thursday, which excludes food and energy prices. The seasonally adjusted core CPI for August is expected to climb 0.3% month-on-month, analysts polled by Reuters expect.
“Although the Fed is now on its media blackout, Wednesday’s PPI and especially Thursday’s CPI will shape pricing ahead of that, with all eyes still focused on the tariff impact,” Deutsche Bank’s economists wrote in a daily note on Monday.
August’s inflation data may show that underlying inflation pressures are enough to keep the pace of Fed easing moves up for active debate, said Ed Yardeni, President of Yardeni Research.
On Tuesday, the Bureau of Labor Statistics will also release its preliminary benchmark revision to March 2025 employment figures, alongside 2025’s first quarter data from the Quarterly Census of Employment and Wages.
In the past week, major bond markets faced renewed upward pressure on yields, particularly the long-dated bonds as investors contend with fiscal and inflation fears.
Last Friday, the 10-year yield dropped to its lowest level since April after the latest U.S. jobs report showed that the pace of hiring in August was slower than expected. Following that, the August reading of the New York Fed’s monthly Survey of Consumer Expectations on Monday revealed that worker confidence in finding a new job reached a record low, adding to concerns about the state of the U.S. labor market.
“Taking away the knee-jerk yields crash seen around the ‘Liberation Day’ de-risking, current U.S. 10-year at sub 4.1% is at lows of the year. We think this is set to continue, partly due to softening labor market data flow,” said JPMorgan strategist Mislav Matejka in a note on Monday.
Yields broadly eased across Friday and Monday, pulling back from some of the eye-catching milestones reached in the earlier parts of last week, which included the Japanese 30-year at a record high, the U.K.’s 30-year at a 27-year high, and the U.S. 30-year peeking above 5% for the first time since July.
