10-year Treasury yield hits new high for the year after very hot producer prices reading

Traders work on the floor at the New York Stock Exchange. Brendan McDermid | Reuters Treasury yields rose Wednesday as investors digested the implications of hotter-than-expected wholesale prices in April. The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — was last up more than 1 basis point at 4.487%. It had risen as much as 3 basis points to hit a high of 4.49%, reaching its highest level since July 17. The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was less than 1 basis point higher at 4.002%. The longer-dated 30-year Treasury bond yield was up more than 1 basis point at 5.046%. It had earlier advanced 2 basis points to 5.05%, its highest level since July 17. One basis point is equal to 0.01%, and yields and prices move in opposite directions. The producer price index rose a seasonally adjusted 1.4% for the month, much higher than the 0.5% Dow Jones consensus forecast and the upwardly revised 0.7% March increase. This was the largest monthly gain since March 2022. On an annual basis, the index was up 6%, the biggest increase since December 2022. "Wednesday's PPI was strikingly elevated as producers are feeling the ripple effects of $100 per barrel oil, which is raising the cost of production across the board, as energy is arguably the most critical input cost," said Clark Bellin, president and CIO of Bellwether Wealth. …