The 10-year U.S. Treasury yield rose on Thursday as investors looked forward to a key inflation report due Friday.
The 10-year Treasury yield rose nearly 3 basis points to 3.869%, while the 2-year Treasury yield gained 3 basis points to 3.898%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Market participants await more economic data, with the focus on Friday on the U.S. Federal Reserve’s preferred gauge of inflation. Economic data released Thursday showed weekly jobless claims fell from the previous week, further easing recession fears. Also, second-quarter gross domestic product was revised up to 3 percent from an initial 2.8 percent.
The U.S. consumer price index will be released on the last trading day of August. The figure could provide further guidance on the outlook for interest rates. Federal Reserve officials use the indicator as their main benchmark for assessing inflation.
Fed Chairman Jerome Powell said last week that “now is the time for monetary policy to adjust,” reinforcing expectations of a rate cut at the central bank’s next meeting. But Powell declined to provide specific guidance on the timing or size of the cut.
Market participants are firmly anticipating a rate cut at the Fed’s September 18 meeting. According to CME Group’s FedWatch tool, traders are currently pricing in a 25 basis point rate cut next month with a probability of about 65.5%, and a 50 basis point rate cut with a probability of 34.5%.
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