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2-Year Treasury Yield Rises Back Above 4% Despite Positive Inflation Reports This Week

Spencer Platt | Getty Images

The 2-year Treasury yield climbed back above 4% even as investors assessed positive economic data this week that showed inflation could be easing.

The 2-year Treasury yield was last up 11 basis points at 4.091%. The 10-year Treasury was last trading at 3.513% after jumping more than 6 basis points.

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Yields and prices have an inverted relationship and one basis point equals 0.01%.

Those moves come even as investors digested Friday's advanced retail sales data that showed consumer spending fell twice as much as expected in March. Retail sales declined by 1% last month as consumers dealt with growing recession fears, more than the 0.5% fall expected by economists polled by Dow Jones.

The report followed key data this week that showed cooling inflation. Thursday's producer price index report for March showed a decline by 0.5% on a monthly basis. Economists previously surveyed by Dow Jones had expected the PPI print to come in flat.

This came after the latest consumer price index reading was published Wednesday. It showed that prices rose by 0.1% in March, slightly less than the 0.2% anticipated by economists, according to a Dow Jones survey.

As the data suggested that inflation is easing, many investors now believe the Fed could pause interest rate hikes sooner.

In recent weeks, Fed officials had indicated that rate increases could be halted soon, but that further hikes were also still on the table and might be necessary to cool the economy.

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