BOND REPORT: Treasury Yields Tick Lower Ahead Of December Inflation Data
11 Janvier 2019 - 02:17PM
Dow Jones News
By Sunny Oh
Consumer prices are expected to fall 0.1% in December
Treasury yields fell Friday ahead of inflation data that could
give the latest indication of budding price pressures as the
Federal Reserve cites tepid inflation for adopting a more patient
path to further rate increases.
The 10-year Treasury note yield fell 1.4 basis points to 2.717%,
while the 2-year note yield also was off 1.4 basis points to
2.551%. The 30-year bond yield was down 0.5 basis point to 3.046%.
Bond prices move in the opposite direction of yields.
Investors are gearing up December's reading of the
consumer-price index, one of the few data releases unaffected by
the government shutdown. Economists polled by MarketWatch expect
CPI to fall by 0.1% thanks to the fall in gasoline prices, leaving
the core reading which strips out volatile energy and food prices
with an expected increase of 0.2%.
Read:Roaring U.S. jobs market, waning inflation give Fed room to
pause on interest rates
(http://www.marketwatch.com/story/roaring-us-jobs-market-banishes-fears-of-recession-but-economy-still-has-soft-spots-2019-01-05)
"The CPI performance for December is likely to closely mirror
the November results. Energy prices probably fell again, likely
even more steeply than in November," wrote Stephen Stanley, chief
economist at Amherst Pierpont Securities.
Several senior Fed officials have pointed to the expectation for
muted inflation increases to argue for a wait-and-see approach to
further rate increases. That has helped diminish concerns that the
central bank will make a policy mistake that causes a steep
economic downturn.
The absence of economic data since the shutdown began has
started to trouble investors and the Fed by driving up uncertainty
around the economy's momentum. If the shutdown continues beyond
Saturday, it will become the longest one in U.S. history. Both
President Donald Trump and Congressional Democrats have shown
little appetite of backing down over the White House's demands for
border wall funding.
See: Government shutdown poses threat of agricultural data shock
(http://www.marketwatch.com/story/government-shutdown-poses-threat-of-agricultural-data-shock-2019-01-10)
Read: The government shutdown is now a day away from tying for
the longest on record
(http://www.marketwatch.com/story/the-government-shutdown-already-ranks-as-the-2nd-longest-in-20-years-2019-01-03)
(END) Dow Jones Newswires
January 11, 2019 08:02 ET (13:02 GMT)
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