Home News Fall in US inflation weighs on Treasury yields and USD/JPY – ForexLive

Fall in US inflation weighs on Treasury yields and USD/JPY – ForexLive

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US inflation means the Fed is on the wrong side of the equation

US 10-year yields are down 3.6 basis points to 2.49%. It’s been a disappointing stretch for bond bears after they hit 2.61% on April 19.

The story today is inflation. The price measures in the GDP report showed the inflation deflator at just 0.6% versus 1.3% expected. Some of that will reverse on higher commodity prices but it’s more evidence that the Phillips Curve isn’t behaving as the Fed expected.

You can see USD/JPY tracking the fall lower in yields with a 10-day chart:

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