10-year treasury yield slips back below 4.6% as investors look to key data

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U.S. Treasury yields retreated on Thursday as investors looked ahead to key economic data and assessed the state of the economy.

The 10-year Treasury yield fell more than 7 basis points to 4.55%, sliding back below the 4.6% mark it had crossed Wednesday for the first time in around a month. The 2-year Treasury yield was last at 4.929% after declining by more than 5 basis points.

Yields and prices move in opposite directions. One basis point is equivalent to 0.01%.

Investors awaited key economic data due toward the end of the week, with the latest personal consumption expenditures price index figures due Friday. The PCE is the Federal Reserve's favored inflation gauge and investors will be watching it closely for hints about the outlook for central bank monetary policy, especially regarding when interest rate cuts may begin.

Personal spending and income data will be released alongside the PCE.

In the run-up to that, traders parsed Thursday data that offered some positive news on inflation. Notably, the chain-weighted price index in the updated first-quarter GDP report was revised lower. That can indicate somewhat cooler inflation than previously believed, but is still above the Fed's 2% goal.

Various Fed speakers are also due to make remarks this week. Policymakers have in recent weeks indicated that interest rate cuts may be a while off, with Minneapolis Fed President Neel Kashkari telling CNBC that it could take "many more months of positive inflation data" before he would support rate cuts.

As inflation has remained more persistent than anticipated, expectations for interest rate cuts have been pushed back to later in the year and fewer rates cuts than previously expected are now being priced in by markets for 2024.

Bond yields were pushed up earlier in the week as traders reacted to weak auction demand.

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