U.S. Treasury Yields Rebound Modestly After May CPI, Analyst Says

A modest rebound led by short-term U.S. Treasuries after the release of the U.S. May CPI report on Wednesday was a reasonable market response, as the inflation data came in better than expected and should reduce the risk of the Federal Reserve raising interest rates later this year. According to Jin10, Afonso Borges, an analyst at Julius Baer Group, said the market reaction was notably calmer than the sharp volatility triggered by last Friday’s stronger-than-expected jobs report. Borges added that across the past 12 inflation-report release days, the average move in the two-year Treasury yield was about 3 basis points. He described that level of movement as very mild, at less than half the average move seen on jobs-report release days.