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10-year Treasury yield rises as investors consider inflation outlook

Spencer Platt | Getty Images

The U.S. 10-year Treasury yield advanced on Monday as investors weighed the state of the economy and awaited key inflation data due later in the week.

The yield on the 10-year Treasury was trading around 3 basis points higher at 4.095%. It had tumbled by close to 15 basis points on Friday after hitting a high of 4.206%, which was a level last seen in early November. The 2-year Treasury yield was down by 1 basis points at 4.781%.

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

Treasury yields recovered some of Friday's tumbles as investors digested the latest jobs report and looked ahead to upcoming inflation figures due this week.

During brief remarks Monday morning, Federal Reserve Governor Michelle Bowman she expects to need more interest rate increases to adequately tame inflation.

"I will be looking for evidence that inflation is on a consistent and meaningful downward path as I consider whether further increases in the federal funds rate will be needed, and how long the federal funds rate will need to remain at a sufficiently restrictive level," Bowman said.

July's jobs report, which was published Friday, showed that nonfarm payrolls increased by 187,000 during the month, below the 200,000 economists previously surveyed by Dow Jones had expected.

Average hourly earnings climbed 0.4% on a monthly and 4.4% on an annual basis, which was slightly above the previously estimated 0.3% and 4.2%.

The data suggested to many analysts and investors that despite some signs of easing, the labor market continues to be resilient even after a series of interest rate hikes from the Federal Reserve.

The central bank has implemented 11 rate increases since early 2022 in an effort to cool the economy, including the labor market, and push inflation lower. At its most recent meeting in July, the Fed hiked rates by 25 basis points and left the door open to raise rates further or keep them steady.

Economic data would be key in such decisions, policymakers have repeatedly said in the last few months.

Key inflation data in the form of the consumer and producer price index reports are due later this week and will provide clues about whether the Fed's policy measures are having the desired effect and what the central bank may do next.

— CNBC's Jeff Cox contributed to this report.

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