Treasury yields move lower as investors assess U.S. inflation backdrop

Treasury yields moved lower on Monday as investors continue to weigh the domestic inflation and interest rate backdrop against broader geopolitical developments.

The yield on 10-year U.S. Treasury — the main benchmark for mortgages, auto loans and credit card debt — fell more than 1 basis point to 5.079%.

The longer-dated 30-year U.S. Treasury bond yield — which often moves on geopolitical developments — was also more than 1 basis point lower at 5.424%.

The yield on the 2-year Treasury note, which more closely follows short-term Federal Reserve rate decisions, was down more than 1 basis point at 4.717%.

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.

The moves lower come despite inflation concerns continuing to loom over the U.S. economy.

Last week’s strong inflation data from the Bureau of Labor Statistics saw wholesale prices rise 6.3% annually last month — the biggest jump since 2022 — with consumer costs up 3.7% annually in September, beating estimates.

Meanwhile, energy prices fell Monday as investors continued to weigh the possibility of more Russian crude supply coming onto the market. U.S. West Texas Intermediate futures for November delivery were down 0.3% at $101.03 per barrel. Brent crude, the global oil price benchmark, dropped 1.3% to $108.40.

With the Federal Reserve’s next interest rate decision due Oct. 28, traders are now pricing in an above-85% probability that the rate-setting Federal Open Market Committee will leave borrowing costs unchanged, according to the CME FedWatch tool.

Key domestic data releases scheduled for this week include September’s housing starts and new building permits data, both due Tuesday from the U.S. Census Bureau.