US Treasury yields are spiking after Wednesday’s consumer price index report showed inflation rose quicker than expected in January.
The report released by the Bureau of Labor Statistics showed consumer prices jumped 2.1% year-on-year in January. Core CPI, which strips out volatile food and energy costs, rose 1.8%. Wall Street economists were expecting respective prints of 1.9% and 1.7%.
Post-data selling has Treasury yields up almost 5 basis points in the belly of the curve. Here’s a look at the scoreboard as of 8:35 a.m. ET:
- 2-year +3.9 bps @ 2.143%
- 3-year +4.6 bps @ 2.353%
- 5-year +5.3 bps @ 2.594%
- 7-year +5 bps @ 2.791%
- 10-year +4.2 bps @ 2.871%
- 30-year +3.4 bps @ 3.145%
The more than 4-bp rise in the 10-year yield has it at the higest levels since January 2014. Traders have been selling Treasuries in droves as of late amid fears that rising inflation will cause the Federal Reserve to raise rates quicker than anticipated.
At its February meeting, the central bank said it expected to raise rates three times in 2018. However, many market participants now think there could be a fourth hike this year.
Wednesday’s selloff has had little imapct on the yield curve as the 2-10-year spread trades little changed near 73 bps.