U.S. Treasury yields rose on Friday after the March producer price index, which measures wholesale price inflation, showed a larger-than-expected rise.
The yield on the 10-year reference cash rose to 1.68% at 9:00 am ET. The yield on the 30-year Treasury bond rose to 2.356%. Yields are reversed to prices.
March PPI data showed an increase of 1.0%, compared to a projected 0.4% increase for economists surveyed by Dow Jones. Most of the increase came from a jump in the prices of final demand goods, the U.S. Bureau of Labor Statistics said.
The publication of the data, initially scheduled for 8:30 a.m., was delayed due to an interruption on the BLS website.
Federal Reserve economists and officials have repeatedly warned that inflation data will show rising prices during the spring and summer months as the economy reopens and recovers from the pandemic, but the increases could be temporary and may not. be cause for concern.
Yields rebounded early in trading after falling in the previous session following negative comments about the economy from Federal Reserve Chairman Jerome Powell. On Thursday, he described the recovery from the pandemic as “uneven”, indicating that a stronger recovery was needed.
“The recovery remains uneven and incomplete,” Powell said Thursday in a virtual event presented by the International Monetary Fund and moderated by CNBC’s Sara Eisen. “This gap we’re talking about is a very serious issue.”
Treasury yields advanced rapidly earlier this year amid inflation concerns amid the economic recovery from the coronavirus. Still, the Federal Reserve has said it will leave inflation hotter if that helps achieve full employment.
Janet Mui, chief investment officer at Brewin Dolphin, told CNBC’s “Street Signs Europe” on Friday that while the Fed had noted that inflation tended to rise, the key would be to see if that continues until the end year and until 2022.
If that happened, Mui believed the Fed could “worry more.” However, if fears are based solely on stronger economic data (and real inflation does not hold), he did not believe it would be a concern for the central bank.
No Friday auctions are scheduled.
– CNG’s Maggie Fitzgerald contributed to this report.