The U.S. 10-year Treasury yield held steady Wednesday as investors pored through the latest data showing inflation last month at its highest in three years, though some pricing pressures weren't as bad as feared.
The yield on the 10-year Treasury note — the main benchmark for mortgages, auto loans and credit card debt — was 2 basis points higher at 4.548%.
Shorter- and longer-dated maturities were also little changed. The yield on the 2-year Treasury note, which closely tracks short-term Federal Reserve interest rate decisions, was up less than 1 basis point at 4.133%.
The 30-year Treasury yield, which traditionally reacts more to geopolitical events, rose less than 2 basis points to 5.029%.
One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.
Yields held where they were after the latest inflation data — while hot — came in as expected. The May consumer price index spiked to a seasonally adjusted 0.5% for the month, and 4.2% from a year ago, which was the fastest rate of price increases since 2023, according to the Bureau of Labor Statistics. Both numbers were in line with expectations from economists polled by Dow Jones.
Core inflation, which strips away volatile food and energy prices, added 0.2% for the month, softer than the 0.3% consensus estimate. It also rose 2.9% over the past year, in line with forecasts.
"Headline inflation remains elevated due to higher energy prices, but softer shelter and services inflation suggest underlying price pressures continue to moderate," said Gargi Chaudhuri, chief investment and portfolio strategist for the Americas at BlackRock. "While stronger labor market data has reduced expectations for near-term rate cuts, we do not yet see evidence that higher energy costs are feeding into broader core inflation."
The hot inflation data comes right before Kevin Warsh leads his first Federal Reserve meeting as chair next week. Policymakers are set to convene June 16-17.
The Fed is expected to hold rates steady this month, but the recent spike in pricing pressures are adding to conviction that the next major move from the central bank will be a hike. Fed funds futures were last pricing in a quarter point raise at the December meeting, according to the CME FedWatch Tool.
May's producer price inflation data is due out Thursday.
— CNBC's Jeff Cox contributed to this report.