{"id":66857,"date":"2023-09-29T12:15:42","date_gmt":"2023-09-29T16:15:42","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/treasury-yields-slip-after-pce-data-shows-core-inflation-slowing-in-august\/"},"modified":"2023-09-29T12:15:44","modified_gmt":"2023-09-29T16:15:44","slug":"treasury-yields-slip-after-pce-data-shows-core-inflation-slowing-in-august","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=66857","title":{"rendered":"Treasury yields slip after PCE data shows core inflation slowing in August"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0002560659\" role=\"document\">\n<p>Two- through 30-year yields slipped Friday morning after data showed that core inflation based on the Federal Reserve\u2019s favorite inflation measure decelerated in August. <\/p>\n<div class=\"paywall\">\n<h2>What\u2019s happening<\/h2>\n<ul class=\"articleList\">\n<li>\n      The yield on the 2-year Treasury<br \/>\n        BX:TMUBMUSD02Y<br \/>\n       was 5.025%, down 4.6 basis points from 5.071% on Thursday. Yields move in the opposite direction to prices.<\/p>\n<\/li>\n<li>\n      The yield on the 10-year Treasury<br \/>\n        BX:TMUBMUSD10Y<br \/>\n       was 4.524%, down 7.2 basis points from 4.596% Thursday afternoon.<\/p>\n<\/li>\n<li>\n      The yield on the 30-year Treasury<br \/>\n        BX:TMUBMUSD30Y<br \/>\n       was 4.664%, down 6.4 basis points from 4.728% late Thursday.<\/p>\n<\/li>\n<\/ul>\n<h2>What\u2019s driving markets<\/h2>\n<p>Data released on Friday showed that inflation, based on the Fed\u2019s favorite measure, the PCE price index, sped up by a sharp 0.4% in August \u2014 the biggest increase in seven months \u2014 due to higher gas prices. The increase over the past year climbed to 3.5% from 3.4% previously. <\/p>\n<p>However, after excluding volatile food and energy costs, the narrower core rate that policy makers care most about rose a soft 0.1% for the month and decelerated to 3.9% from 4.3% over the past year. The year-over-year increase for core prices was the slowest 12-month pace in almost two years.<\/p>\n<p>The inflation report didn\u2019t meaningfully move the needle on Fed rate-hike expectations by year-end. Fed funds futures traders now see an 86.7% chance of no action in November, which would keep the Fed\u2019s main interest-rate target at between 5.25%-5.5%, according to the CME FedWatch Tool. The chance of no hike in December was seen at 68.8%.<\/p>\n<p>In other data, the nation\u2019s trade deficit in goods dropped 7.3% in August to $84.3 billion versus $90.9 billion in the prior month.<\/p>\n<h2>What analysts are saying<\/h2>\n<p>\u201cFriday\u2019s PCE on a core basis, which removes food and energy prices, suggests that inflation is continuing to decelerate, meaning the Fed\u2019s aggressive campaign is working. The challenge is that core PCE remains almost double the Fed\u2019s 2% target, prompting the Fed to keep the possibility of another rate hike in play,\u201d said\u00a0Carol Schleif, chief investment officer of BMO Family Office, based in Minneapolis.<\/p>\n<p>\u201cOur base case is for higher market volatility through year-end as businesses and consumers continue to adjust [to] a higher-for-longer interest rate regime, which could dampen consumer demand heading into the all-important holiday shopping season,\u201d Schleif wrote in an email.\u00a0\u201cA government shutdown could complicate the Fed\u2019s ability to be data dependent which ironically could cause them to err on the side of holding steady, instead of increasing rates, until they get clearer data sets because economic data would not be tabulated during a government shutdown.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/story\/bond-yields-slip-ahead-of-pce-data-bff639b8?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Two- through 30-year yields slipped Friday morning after data showed that core inflation based on the Federal Reserve\u2019s favorite inflation measure decelerated in August. What\u2019s happening The yield on the 2-year Treasury BX:TMUBMUSD02Y was 5.025%, down 4.6 basis points from 5.071% on Thursday. Yields move in the opposite direction to prices. The yield on the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1898,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-66857","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Treasury yields slip after PCE data shows core inflation slowing in August | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Two- through 30-year yields slipped Friday morning after data showed that core inflation based on the Federal Reserve\u2019s favorite inflation measure\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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