U.S. Treasury bond yields fell on Tuesday after a cool reading for May retail sales raised concerns about the strength of the economy.
The 10-year Treasury yield was more than 6 basis points lower at 4.215%. The 2-year Treasury note yield was down more than 5 basis points at 4.708%.
Yields and prices move in opposite directions. One basis point is equivalent to 0.01%.
Retail sales were up just 0.1% in May, below the 0.2% expected by economists, according to Dow Jones. There was also a downward revision to the April data, which now shows a 0.2% decline.
Signs of a weakening consumer could spur the Federal Reserve to cut rates later this year, potentially multiple times. Last week, the Fed held its benchmark policy rate steady at 5.25% to 5.50% and indicated that just one rate cut would take place this year.
Minneapolis Federal Reserve President Neel Kashkari on Sunday told CBS News that it is a “reasonable prediction” that the U.S. central bank will cut interest rates once this year, waiting until December to do it.
“We need to see more evidence to convince us that inflation is well on our way back down to 2%,” Kashkari said in an interview with CBS’ “Face the Nation” program.
It is a short week in the U.S., with markets closed on Wednesday for the Juneteenth holiday.
