US Treasury yields decline on renewed interest rate expectations

US Treasury bond yields have been declining since the beginning of daily trading on Thursday, affected by inflation readings. The latest CPI print, for April, shed light on positive numbers that may push the Fed in the direction of lowering interest rates.

The consumer price index reading in the United States rose by 0.3% last April, compared to the previous reading, which recorded 0.4%, in contrast to expectations that indicated the same number recorded in the previous reading.

The annual reading of the US Consumer Price Index rose by 3.4% last April compared to the reading recorded in the same month last year at 3.5%, which indicates levels that are consistent with expectations.

The Consumer Price Index reading excluding food and energy prices rose by 0.3% last April, compared to the reading recorded the previous month, which recorded 0.4%, which was also in line with expectations.

The annual reading of this index increased by 3.6% compared to the previous reading of 3.8%, which was in line with market expectations.

Ten-year US Treasury bond yields fell to 4.357%, compared to the last daily close, which recorded 4.343%. Yields on benchmark government bonds rose to their highest level of 4.454%, compared to the lowest level of 4.343%.

There is a direct relationship between expectations of a rate cut and US bond yields, which led to a decline in these yields after the emergence of a batch of data that led to an escalation in expectations of a potential rate cut.