U.S. Treasury yields fell on Thursday after the release of weaker-than-expected inflation and disposable income data, supporting market views that interest rates are at or near their peak.
* The 10-year benchmark yield fell 10.6 basis points to 4.847%. On Monday, it exceeded 5%, after doing so last week for the first time in 16 years. The 30-year yield fell 10.4 basis points to 4.988%.
* The difference between two and 10-year Treasury bond yields, considered an indicator of economic expectations, stood at -19.7 basis points.
* The yield on the two-year note, which generally moves in line with expected interest rates, fell 7.9 basis points to 5.042%.
* Yields rose in October on expectations that the US Federal Reserve will maintain a course of higher rates for longer as inflation continues.
But they fell on Thursday after the publication of various economic data, including a total GDP of 4.9% that met expectations. Meanwhile, the inflation indicator, core personal consumption expenditure (PCE), was below expectations at 2.4%, the lowest since the fourth quarter of 2020.
* The data showed that consumer spending remained strong in the third quarter, which analysts pointed to as one of the main reasons for the economy’s stability.
But personal disposable income in the third quarter rose only 1.9% to $95.8 billion, a sharp decline from the 6.1% increase to $296.5 billion in the second quarter.
Meanwhile, new applications for unemployment benefits rose by 10,000 last week to 210,000.
* “Today’s numbers suggest there’s still plenty of momentum in the economy, but there are plenty of headwinds on the horizon,” said Kim Rupert, managing director of global fixed income at Action Economics in San Francisco.
* The Treasury Department plans to auction $38 billion in seven-year notes, $95 billion in four-week notes, and $85 billion in eight-week notes on Thursday.