US 10-Year Yield Drops to 4.93% on Steady CPI

The U.S. 10-year Treasury yield dropped to 4.93% on Friday. It had reached 4.979% earlier in the session. The decline followed the release of August consumer price data.

Consumer prices rose 3.4% in August compared to the prior year. This annual rate matched the figure recorded in July. The monthly increase was 0.4%. The data aligned with market expectations, easing immediate inflation fears.

Bond markets stabilize after weekly selloff

Global bond yields had climbed sharply over the previous week. The 10-year Treasury yield approached 5% before the data release. This marked the highest level since late 2023. Investors reacted quickly to the stable inflation figures.

U.S. stock indexes gained 1% or more following the report. The relief in bond markets supported equity prices. Traders reduced risk positions after the week-long volatility.

Federal Reserve policy remains uncertain

Market expectations still include a probability of a rate hike next week. Some investors expect the Federal Reserve to hold rates steady. The central bank is likely to remain data dependent. Energy and food prices continue to influence consumer costs.

Treasury Secretary Scott Bessent directed the expansion of the repurchase program for longer-dated securities. The department plans outlays of at least $4 billion. This move aims to support the long end of the bond market.

Global yields face continued pressure

According to GN auto markets/bonds: bond yields, global 10-year benchmark yields rose nearly 19 basis points on average. This was the steepest weekly increase since the Iran conflict began. German 10-year bund yields reached levels unseen since 2011. French 10-year yields hit a 2008 high of 4.46%.

Brent crude oil prices settled near $104 per barrel on Friday. This represented a 3% decline from Thursday levels. Oil prices had exceeded $108 per barrel earlier in the week. Supply concerns continue to weigh on inflation expectations.