U.S. Treasury yields inched higher on Wednesday as investors looked ahead to a handful of fresh economic data, including retail sales and wholesale inflation.
The 10-year Treasury yield added 3.7 basis points to 4.536%, while the 2-year Treasury yield climbed 4.2 basis points to 4.059%.
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WATCH HEREOne basis point is equivalent to 0.01%, and yields and prices move in opposite directions.
Investor worries about the effects of tariffs on the U.S. economy were calmer on Wednesday after inflation came in lighter than expected on Tuesday, and showed that prices had not increased massively yet. They'll next look to see if Thursday's producer price index report will further calm concerns tied to price pressures. Wall Street will also parse consumer spending figures on Thursday, as well as initial jobless claims.
The consumer price index for April rose 2.3% on an annual basis, coming in below the 2.4% increase forecast by economists, according to Dow Jones. Meanwhile, core inflation — which excludes food and energy prices — came in at 2.8%, matching expectations.
The Federal Reserve warned of stagflation in its May meeting, owing to high tariffs implemented by U.S. President Donald Trump in April.
However, a series of positive developments including a 90-day pause on "reciprocal" tariffs for most countries, a trade deal with the U.K. and an agreement with China to temporarily drop most levies have assuaged the threat of stagflation.
Money Report
Deutsche Bank analysts noted that the "broad impact" of tariffs was "muted" in the inflation data.
"Our US economists think the April data is still too early for the Liberation Day tariffs to show up in the aggregate numbers, and they don't expect the effects to show up in consumer prices until June," the analysts said in a note.
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