NEW YORK, Sept 15 (Reuters) – U.S. government bond yields ticked higher on Wednesday, in a bounce back as the 10-year yield touched a fresh three-week low following economic data that showed U.S. import prices fell for the first time in 10 months in August, further evidence that inflation had probably peaked.
With no top tier economic data coming in the rest of the week, traders are looking forward to next week’s Federal Reserve meeting as it prepares to reduce its trove of bond holdings.
Economic data is starting to underpin the idea that high inflation is transitory according to Jason Pride, chief investment officer for private wealth at Glenmede.
“It seems like the market storyline is coming around to the Fed’s storyline, which I believe is stabilizing the range of where interest rates are priced,” Pride said.
The yield on 10-year Treasury notes was up 3.5 basis points to 1.314% after earlier touching a three-week low of 1.26%.
The yield on the 30-year Treasury bond was up 2.6 basis points to 1.878%.
A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 109.9 basis points.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 0.4 basis points at 0.213%. (Reporting by Rodrigo Campos)
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