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U.S. consumer price index (CPI) inflation rose 0.6% in the latest data, initially pushing U.S. yields higher and increasing market expectations for an October rate hike by the Federal Reserve.
Mohamed A. El-Erian, president of Queens' College, University of Cambridge, reported that both yields and the probability of a rate hike moderated during the trading session.
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El-Erian has recently highlighted the U.S. budget deficit nearing $2 trillion for the fiscal year ending September 30, or about 6% of GDP here. He also reported on the U.S. 10-year Treasury yield reaching 5.22 percent, its highest since 2002 here. These developments provide context for the shifts in yields following the latest inflation data.