10-year Treasury yield is flat after PCE inflation report is mostly as expected

• The 10-year Treasury yield was unchanged at 4.647%, the 30-year bond yield held at 5.181%, and the 2-year note remained at 4.199%
• Oil prices extended declines with Brent crude falling 2.8% to $86.08 per barrel and U.S. crude down 3% at $79.93, easing inflation concerns amid reports of a potential Iran-Oman deal on Strait of Hormuz transit
• July PCE data and second-quarter GDP estimates are scheduled for Wednesday at 8:30 a.m., with Fed Chairman Kevin Warsh set to speak at Jackson Hole on Friday

Market Summary: Treasury Yields Steady Ahead of PCE Inflation Data

Key Developments

Treasury yields remained largely unchanged on Tuesday as investors awaited critical inflation data. The 10-year Treasury yield held steady at 4.647%, while the 30-year bond yield stood at 5.181% and the 2-year note at 4.199%.

Key Data Points

• 10-year yield: 4.641% (+0.002)
• 30-year yield: 5.173% (-0.001)
• 2-year yield: 4.195% (-0.009)

Important Upcoming Releases

Markets are focused on Wednesday's 8:30 a.m. ET release of July's Personal Consumption Expenditure (PCE) index—the Federal Reserve's preferred inflation gauge—alongside a second-quarter GDP estimate. These metrics will provide crucial insights into the inflation trajectory and economic growth.

Market Catalysts

Energy Markets: Oil prices declined significantly, with Brent crude futures falling 2.8% to $86.08 per barrel and U.S. crude down 3% at $79.93. The drop followed reports that Iran and Oman are nearing an agreement to ensure safe transit through the Strait of Hormuz, easing geopolitical tensions.

Jackson Hole Symposium: Investors are monitoring the Jackson Hole Economic Policy Symposium beginning Thursday for signals on U.S. monetary policy direction. Federal Reserve Chairman Kevin Warsh is scheduled to speak Friday.

Market Implications

The stability in Treasury yields reflects a wait-and-see approach as traders position ahead of the PCE data. Oil price declines could ease inflation pressures, potentially influencing Fed policy decisions. The 10-year yield remains critical as the benchmark rate affecting mortgages, auto loans, and credit card debt across the economy.