By Emese Bartha and Jessica Coacci
Long-run Treasury yields cooled slightly but are still hovering near their multiyear highs as investors raised their bets the Federal Reserve will hike interest rates at its meeting next week.
The Labor Department reported that the consumer price index held steady at 3.4% in August, matching economist expectations. However, a firmer-than-expected measure that excludes volatile food and energy prices came in higher than expected.
The U.S. 2-year yield, sensitive to expectations for short-term interest rates, hovered around 4.61% in midday trading on Friday. Earlier in the session, the 2-year yield rose to as high as 4.644%, the highest level since July 2024.
The 10-year Treasury yield edged down after nearing 5% ahead of the CPI print, as investors bet the Fed will buckle down in its inflation fight and reduce the risk that the central bank will need to raise rates even more in the future. The 10-year yield now sits at about 4.95%.
