Treasury yields fall after in-line inflation data as equities drop
TLT•U.S. Treasury yields fell after inflation data broadly matched expectations, while third-quarter GDP grew at a 3.4% annualized rate. The 10-year yield was down 6.3 basis points at 4.982%.
1. Yields decline
U.S. Treasury yields eased Thursday after the Personal Consumption Expenditures Price Index rose 0.5% in September, in line with economists’ expectations, following an unrevised 0.3% increase in August. The 10-year yield was down 6.3 basis points at 4.982%, the 30-year yield fell 3.9 basis points to 5.322%, and the two-year yield dropped 8.3 basis points to 4.652%.
2. Economic data mixed
A separate report showed U.S. gross domestic product grew at a 3.4% annualized rate in the third quarter, faster than expected. The data did little to change rate expectations for December; futures priced in about an 83% chance of a 25-basis-point hike at the Fed’s next meeting, unchanged from before the reports.
3. Market context
Investors were also digesting a drop in U.S. stocks, with Alphabet results rekindling concerns about AI spending. A Jefferies economist said the strong GDP figure had aspects that may not be sustainable, while September income and spending data showed a flat print and a savings rate below 4%.
