10-Year Treasury Yield Dips Amid Rising Consumer Inflation Fears
The 10-year Treasury yield edged slightly lower on Friday as investor concerns about rising consumer inflation weighed on the bond market.
The benchmark 10-year yield dropped 1.2 basis points to 4.445%, while the 2-year yield increased by 2.6 basis points to 3.999%. The decline followed a discouraging consumer sentiment report from the University of Michigan, which showed a drop to 50.8 in May, the second-lowest reading on record.
The survey revealed heightened inflation expectations, with consumers predicting a 7.3% price increase over the next year, up from 6.5% in April. Longer-term inflation expectations also rose slightly to 4.6% from 4.4%.
Despite a temporary 90-day pause on U.S.-China tariffs announced earlier this week, ongoing concerns about rising costs continue to weigh on businesses and consumers.
Federal Reserve Chair Jerome Powell cautioned on Thursday that long-term interest rates could remain elevated due to frequent economic policy shifts and persistent supply chain shocks. “We may be entering a period of more frequent and potentially more persistent supply shocks,” Powell said during remarks at the Thomas Laubach Research Conference in Washington, D.C.