Treasury yields rise as investors await key inflation print

U.S. Treasury yields inched higher early Tuesday as investors look toward key inflation data for July and assess the extension of U.S.-China trade truce.

The 10-year Treasury yield was marginally higher at 4.279% at 3.34 a.m. ET, and the 2-year Treasury yield was about one basis point higher at 3.764%. The 30-year Treasury bond yield was less than one basis point higher at 4.848%.

One basis point is equal to 0.01% and yields and prices move in opposite directions.

The core consumer price index, which is set to be released Tuesday morning, is expected to climb 3.1% on a yearly basis and 0.3% on a monthly basis, according to analysts polled by Reuters. That would be up from June’s 2.9% and 0.2%, respectively.

“We think the market reaction to the CPI is probably skewed in favor of Fed rate cuts,” said Eastspring Investments. A lower-than-expected CPI should increase market pricing for cuts in September and year-end as it reduces the “ostensible need” for Fed caution about inflation, the investment firm’s experts said in a note.

“Our concern is that July, and even August data, will be too early to be conclusive about the tariff impact,” they warned.

The U.S. and China have agreed to extend their tariff truce by another 90 days, with significant disagreements still blocking a final agreement. Both sides aim to hold a leaders’ summit later this year to resolve the deadlock.