US Treasury yields fell again on Thursday after the latest inflation data showed an unexpected decline.
The rate on the 10-year treasury fell by 5 basis points to 4.242%. The yield on benchmark notes also reached the lowest level since April 1, briefly reaching 4.24%.
The 2 year treasury Interest rates also fell by 6 basis points to 4.691%. Yields and prices move in opposite directions and one basis point equals 0.01%.
The producer price index published on Thursday showed a decline of 0.2% in May. That could be welcome news for investors looking for signs of easing inflationary pressures. Economists polled by Dow Jones expected prices to rise 0.1% this month.
Weekly unemployment benefits data also released Thursday came in at 242,000, well above economists' 225,000 forecast. That could provide another positive indicator for those hoping the Federal Reserve has seen enough evidence that high interest rates have tightened the economy.
The releases come after the Fed on Wednesday kept interest rates steady at 5.25%-5.50% and suggested only one rate cut later this year, down from the three cuts forecast in March. The US central bank showed some optimism that inflation remains on track to return to the Fed's 2% target, allowing some policy easing in the coming months.
“Inflation has declined over the past year, but remains high,” the statement after the meeting said. “There has been modest further progress towards the Committee's 2 percent inflation target in recent months.”
Treasury yields plunged in the previous session after the May consumer price index report remained unchanged month over month.
— Jeff Cox contributed to this report.
