The yield on US Treasury bonds declined moderately, while investors continue to analyze yesterday's CPI data and statements by Fed policymakers, and prepare for the publication of new inflation data.
The yield on 5-year Treasury bonds fell by 2.3 basis points, reaching 3.896%, while the yield on 30-year bonds was 4.372% (-1.3 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, decreased by 2.9 basis points to 3.97%, while the yield on 10-year bonds fell to 4.077% (-1.7 basis points).
Yesterday, Atlanta Fed President Rafael Bostic indicated his willingness to suspend the cycle of monetary policy easing at the November meeting if the data warrants it. However, Chicago Fed President Austan Goolsbee said that the "vast majority" of policymakers expect rates to "gradually decrease to a level well below where they are today."
Today, market participants will focus on U.S. producer price index (PPI) for September, as well as the Reuters/Michigan consumer sentiment index for October, especially the details of the report related to consumer inflation expectations. This data may provide additional clues about the prospects for interest rates. According to consensus estimates, PPI increased by 0.1% m/m and 1.6% per annum, consumer sentiment index increased to 70.8 from 70.1 in September, while annual inflation expectations fell by 0.1% to 2.6%.