NEW YORK, Aug 11 (Reuters) - U.S. Treasury yields fell on Friday as softer-than-expected U.S. inflation data for July further eroded expectations of an interest rate hike by the Federal Reserve at its December monetary policy meeting.
The U.S. consumer price index edged up just 0.1 percent last month after being unchanged in June. Economists polled by Reuters had forecast the CPI rising 0.2 percent in July. Stripping out the volatile food and energy components, consumer prices gained 0.1 percent for a fourth straight month.
In early morning trading, benchmark U.S. 10-year yields dropped to six-week lows of 2.182 percent after the data, compared with 2.211 percent late on Thursday. U.S. two-year yields, the tenor most sensitive to rate hike expectations, sank to an eight-week low of 1.314 percent, down from Thursday’s 1.335 percent. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama)