10-Year Treasury Yield Rises Back to Highest Level in More Than Three Years

Source: NYSE

The benchmark 10-year U.S. Treasury yield rose back to its highest point in more than three years on Thursday as traders continued to assess rising inflation.

The yield on the 10-year Treasury note rose 13 basis points to 2.827% on Thursday, reaching its highest point since late 2018. The yield on the 30-year Treasury bond jumped 12 basis points to 2.919%. Yields move inversely to prices and 1 basis point is equal to 0.01%.



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Those moves come as investors continued to assess inflationary pressures this week. On Thursday, the U.S. Census Bureau reported a 0.5% gain in March, a little less than the 0.6% gain expected by the Dow Jones. The biggest driver of sales came from gas stations.

The Bureau of Labor Statistics reported on Wednesday that the March producer price index, which tracks prices paid by wholesalers, rose 11.2% on the previous year, its biggest gain since 2010.

The reading came a day after the latest consumer price index, which showed prices inflated 8.5% in March from the same time last year, it's biggest increase since 1981. However, the core CPI reading for the month rose just 0.3%, which was below the 0.5% inflation forecast, giving some investors hope that inflation could be starting to peak.

Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, told CNBC's "Squawk Box Europe" on Thursday that his firm is more concerned about shelter prices and the "more persistent forces of inflation."

Shelter costs, which make up about one-third of the CPI weighting, rose 5% year on year in March, the highest since 1991.

Ahmed said demand is starting to fade in some consumer segments, and with a stabilization in oil prices, he believes "some of the very extreme momentum we saw accelerate over the last couple of months [would] ease off."

Nevertheless, Ahmed said inflation remains high, and the focus continues to be on whether the Fed would go ahead with its aggressive tightening of monetary policy, and "if it remains the case then of course recession probabilities will rise."

Jobless claims jumped 185,000 for the week ending April 9, according to data from the Labor Department.

Investors also continue to monitor developments in the Russia-Ukraine war. U.S. President Joe Biden announced another $800 million in weaponry for Ukraine on Wednesday, following an hour-long phone call with the country's president, Volodymyr Zelenskyy. staff contributed to this market report.

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