Treasuries Move Notably Lower Following Inflation Data

(RTTNews) - After ending the previous session roughly flat, treasuries showed a notable move to the downside during trading on Tuesday.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 6.2 basis points to 4.489 percent.

With the sizable increase on the day, the ten-year yield ended the session at its highest closing level in over a month.

The weakness among treasuries came following the release of the Labor Department's closely watched report on consumer price inflation.

While the data largely came in line with economist estimates, the report was not seen as likely to accelerate interest rate cuts by the Federal Reserve.

The Labor Department said its consumer price index rose by 0.3 percent in June after inching up by 0.1 percent in May.

The annual rate of consumer price growth accelerated to 2.7 percent in June from 2.4 percent in July. Economists had expected the price of growth to rise to 2.6 percent.

The Labor Department also said the core consumer price index, which excludes food and energy prices, edged up by 0.2 percent in June after creeping up by 0.1 percent in May. Core prices were expected to increase by 0.3 percent.

"Defying expectations, the core CPI increase of just 0.2 percent in June reveals an ongoing benign response to the tariffs so far," said Nationwide Chief Economist Kathy Bostjancic.

She added, "That said, the Fed's job in deciding when to resume rate cuts remains difficult, especially given the fresh threats of additional tariffs which heighten the uncertainty of the eventually effective tariff rate and the impact on inflation and growth in the coming months."

The report said the annual rate of core consumer price growth ticked up to 2.9 percent in June from 2.8 percent in May, in line with economist estimates.

Trading on Wednesday may be impacted by reaction to reports on producer prices and industrial production.