Bond Report: 10-year Treasury yield back above 3% after U.S. inflation rate comes in at 8.3% for April

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Treasury yields advanced Wednesday morning, with the 10-year rate back above 3%, after data showed the U.S. inflation rate slowing to 8.3% in April though not by enough to suggest price gains will ease soon.

What are yields doing?
  • The yield on the 10-year Treasury note

    rose to 3.018%, compared with 2.99% at 3 p.m. Eastern on Tuesday. Yields and debt prices move opposite each other.

  • The yield on the 2-year Treasury note

    was at 2.672% versus 2.623% Tuesday afternoon.

  • The 30-year Treasury bond yield

    was at 3.162%, up from 3.127% late Tuesday.

What’s driving the market?

Data released Wednesday showed that the annual headline U.S. inflation rate fell to 8.3% in April — the first decline in eight months — but the upward pressure on prices is unlikely to ease rapidly enough to give Americans much relief. It was expected to come in at 8.1%, the median estimate of forecasts.

The so-called core rate of inflation, which omits food and energy, rose by a somewhat stronger 0.6% — above the 0.4% increase expected.

The slower pace of inflation doesn’t necessarily signal the tide has turned in the upward pressures of price gains, analysts said. Continued supply-chain disruptions, rising fuel costs, a tight labor market and other factors remain at play.

Read: Here are 4 reasons why market volatility is unlikely to soon subside

Treasury yields have risen sharply in 2022 as investors react to surging inflation and the Federal Reserve’s scramble to rein in price pressures. Last week, the Fed raised its main policy rate target by 50 basis points, or half a percentage point, rather than moving in its usual quarter-point increment. Fed Chairman Jerome Powell has said half-point moves, rather than the central bank’s usual quarter-point increment, are on the table for the next few meetings.

What do analysts say?

“The pace of price increases moderated, but not as much as expected,” said Greg McBride, chief financial analyst at “With the annual rate ticking down from 8.5% to 8.3%, it can be tempting to say we’ve seen the peak, but we’ve also been head-faked before as was the case last August.”