Treasury yields drop after cool monthly consumer inflation data

U.S. Treasury yields retreated on Wednesday after monthly consumer inflation data came in softer than anticipated.

The yield on the 10-year Treasury fell more than 8 basis points to 4.363%. The 2-year Treasury yield was last at 4.726% after sliding by more than 9 basis points.

Yields and prices move in opposite directions. One basis point equals 0.01%.

The consumer price index rose 0.3% from March to April, slightly below the 0.4% consensus forecast of economists polled by Dow Jones. The measure of a basket of goods and services on an annualized basis increased by 3.4%, in line with expectations.

Core CPI, which strips out food and energy prices, added 0.3% from the previous month and 3.6% from a year earlier. Both were in line with forecasts.

The data comes a day after the producer price index for April, which tracks wholesale prices, came in higher than expected on Tuesday. It rose 0.5% from the previous month, the Labor Department’s Bureau of Labor Statistics reported, higher than the 0.3% increase estimated by economists surveyed by Dow Jones.

Following the PPI release, Federal Reserve Chair Jerome Powell on Tuesday suggested the central bank would need to be patient as inflation has remained at a higher level than anticipated for longer.