US Treasury yields hit new highs as PCE cooling fails to offset hawkish Fed tone

US Treasury yields surged to fresh record levels on Thursday, defying a welcome dip in the latest inflation data.

The move underscores a growing disconnect between official price metrics and market sentiment, as investors digest the hawkish rhetoric from the new Federal Reserve chair alongside persistent concerns over US equity valuations.

1% in June, slightly below expectations but enough to keep the central bank on hold.

The Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, fell for the first time since the onset of the pandemic.

However, the core PCE measure ticked up 0.1% in June, slightly below expectations but enough to keep the central bank on hold.

According to reports from Infomoney and MarketWatch, the Federal Reserve is maintaining its cautious stance on interest rates despite the headline improvement, signaling that the path to lower rates remains uncertain.

The bond market’s reaction suggests traders are less focused on the immediate inflation print and more concerned about the broader macroeconomic regime.