(Bloomberg) — Treasury yields rose from a three-month low ahead of a key inflation report that may shape market expectations that the Federal Reserve will cut interest rates as soon as next month.
Ten-year yields rose 7 basis points last week to about 4.3%, marking the first increase in three weeks. Traders priced in an over 80% probably for a Fed rate cut in September, interest-rate swaps showed.
Inflation data due on Tuesday is set to provide evidence on how President Donald Trump’s tariffs are impacting the economy. Economists expect that consumer prices, excluding volatile food and energy, rose 0.3% in July, quickening from a 0.2% increase the prior month.
The Fed has been resisting the pressure from Trump to lower rates as it seeks to balance the risks of a colling job market and still elevated inflation. The president last week installed an ally at the central bank after picking Stephen Miran, chair of the Council of Economic Adviser, as a Fed governor.
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