April 30, 2018 / 1:08 PM / a month ago

UPDATE 1-U.S. TIPS breakeven rates flat after in-line March PCE data

(Adds background, updates market action)

NEW YORK, April 30 (Reuters) - The U.S. bond market’s barometers of investors’ inflation outlook were little changed on Monday as a measure of price growth that is the Federal Reserve’s preferred gauge rose in March in line with analyst forecasts.

Domestic consumer prices as measured by the personal consumption expenditures (PCE) price index jumped 2.0 percent year-on-year in March. That was the biggest gain since February 2017 and followed a 1.7 percent rise in February, the Commerce Department said on Monday.

The PCE index, excluding volatile food and energy components, increased by 1.9 percent on a 12-month basis through March, marking the biggest gain since February 2017. This compared with a 1.6 percent increase in February.

Fed policymakers have said they expect year-over-year PCE increases to reach 2 percent.

They are scheduled to meet for two days starting on Tuesday and are expected to leave interest rates unchanged in the current range of 1.50-1.75 percent.

Currently, interest rates futures imply traders have priced in a 45 percent chance the U.S. central bank will raise short-term borrowing costs three more times in 2018 with the next hike at its June 12-13 meeting, CME Group’s FedWatch program showed.

At 8:56 a.m. (1256 GMT), the 10-year inflation breakeven rate, or the yield gap between 10-year Treasury Inflation Protected Securities and regular 10-year Treasury notes, was 2.17 percent, down 0.05 basis point from late on Friday, Tradeweb data showed. (Reporting by Richard Leong Editing by Chizu Nomiyama and Steve Orlofsky)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below