US yields drop as inflation data takes focus

US bond yields fell today, May 14, as investors assessed the chances of a Federal Reserve rate cut following slower-than-expected inflation in April.

The two-year Treasury yield, sensitive to policy changes, dropped by one basis point (bp) to 4.009% at 3:35 pm Makkah time.

The 10-year yield decreased by 1.8 bp to 4.481%, and the 30-year yield slipped by 1.4 bp to 4.929%.

US annual inflation slowed to 2.3% in April, below the 2.4% forecast, while the core consumer price index (CPI), excluding food and energy, remained unchanged at 2.8%.

Investors are awaiting tomorrow’s Producer Price Index data for further clues on the Fed’s interest rate path.