Treasury yields fluctuated Wednesday as investors digested key economic data that showed hot price pressures and an unexpected contraction in the U.S. economy.
The benchmark 10-year Treasury yield was down less than 1 basis point at 4.166%. The 2-year Treasury yield dipped less than 5 basis points to 3.609%.
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WATCH HEREOne basis point is equivalent to 0.01%. Yields move inversely to prices.
Gross domestic product, a sum of all the goods and services produced from January through March, fell at an annualized pace of 0.3%. Economists surveyed by Dow Jones had been looking for a gain of 0.4% after GDP rose 2.4% in the fourth quarter of 2024.
Traders seemed to focus on the inflation readings in the GDP report. The personal consumption expenditures price index, the Fed's preferred inflation measure, posted a 3.6% gain for the quarter, up sharply from the 2.4% increase in Q4. Excluding food and energy, core PCE was up 3.5%.
The Commerce Department reported later in the morning that the PCE price index in March was little changed. The headline annual inflation reading was 2.3% for the month, slightly higher than expected, while core was at 2.6%, as forecast.
Investors have also been monitoring the latest tariff developments with some relief as President Donald Trump appears to be willing to negotiate on tariffs with trade partners.
Money Report
Commerce Secretary Howard Lutnick told CNBC on Tuesday that the White House would soon announce a trade deal, but the country wasn't named. Trump also said later that tariff negotiations with India are "coming along great" and a deal would be reached soon.
Trump also softened automotive tariffs, signing an executive order on Tuesday that would reduce the overall level of duties on vehicle imports that had been affected by separate levies "stacking" on top of one another.
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