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U.S. Treasury yields fall as inflation grows in America

On May 13, U.S. Treasury yields declined slightly after more hot inflation data. The yield on the benchmark 10-year Treasury note dropped about 3 basis points to 1.67%. Meanwhile, the yield on the 30-year Treasury bond fell 2 basis points to 2.4%. Yields move inversely to prices.

According to Dow Jones, April’s Producer Price Index surged 0.6% from the previous month, compared to the increase of 0.3% estimated by economists. Furthermore, the gauge boosted 6.2% for the 12 months ended in April, marking the biggest rise since the agency started tracking the data in 2010. Year over year, the index was anticipated to grow by 3.8%.

Additionally, the 10-year yield closed the yesterday’s session at 1.70%. Remarkablyy, it’s highest point in over a month after a key inflation report revealed rates rose faster than anticipated. April’s Consumer Price Index increased 4.2%, its biggest year-on-year increase since 2008.

Inflation has been a growing concern for investors. However, the Federal Reserve has insisted any price rises should be transitory, pointing to the re-opening of the economy in the recovery from the COVID-19 pandemic.

The American currency held steady near week highs

The U.S. dollar was steady near week highs on May 13 after the U.S. Labor Department published higher producer prices in April, further indication that inflation is growing in the United States.

The producer price index increased 0.6% in April after rising 1.0% in March. In the 12 months, the PPI gained 6.2%. This was the largest year-on-year increase since 2010.

The U.S. dollar index was slightly changed on the day at 90.741.

The euro increased 0.05% to $1.2076. The dollar declined by 0.26% to 109.48 Japanese yen.

According to Federal Reserve Governor Christopher Waller, it is anticipated inflation to surpass the Fed’s 2% target for the next two years. However, he announced the Fed would not increase rates until it sees inflation above target for a long time or excessively high inflation.

After its biggest daily decline since March on Wednesday, the risk-sensitive Australian dollar gained 0.02% at $0.7726 against the U.S. dollar.

The largest cryptocurrency, Bitcoin, fell by 17% when Tesla CEO Elon Musk announced his firm would stop accepting cryptocurrencies as payment for its vehicles. As of May 14, it is trading at nearly $50,370.80.

Bitcoin is still higher than where it was just before Tesla announced on February 8 that it had purchased about $1.5 billion in bitcoin and would accept it for payment in the near future.

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