Treasury yields were flat on Tuesday after a key inflation report came in slightly hotter-than-expected.
The yield on the benchmark 10-year Treasury note rose to 1.677% at around 8:30 a.m. ET. The yield on the 30-year Treasury bond climbed to 2.347%. Yields move inversely to prices.
Consumer prices rose March, the Labor Department reported Tuesday. The consumer price index rose 0.6% from the previous month but 2.6% from the same period a year ago. The year over year gain is the highest since August 2018.
Economists polled by Dow Jones are projecting the headline index to rise by 0.5% month-over-month and 2.5% year-over-year.
Yields got hit Tuesday morning when the Food and Drug Administration said it is asking states to pause administering J&J’s Covid-19 vaccine after six people in the U.S. developed a rare disorder involving blood clots. The FDA said the recommendation is “out of an abundance of caution.”
Treasury yields have jumped from just below 1% since the end of January, over fears of inflation rising as the U.S. economy recovers from the coronavirus pandemic.
Eric Lonergan, fund manager at M&G, told CNBC’s “Squawk Box Europe” Tuesday that he believed bond markets had now “priced in a kind of post-crisis normalization” with the recent jump in yields.
He also said that an anticipated rise in inflation had been “so well-flagged now, (that) everybody is expecting some kind of temporary increase.”
Traders will also likely be keeping an eye on the auction of $24 billion of 30-year bonds, as a gauge for investor appetite for long-dated government debt.
An auction for $40 billion of 42-day bills is also scheduled on Tuesday.
— CNBC’s Patti Domm contributed to this report.
