Treasury yields were relatively unchanged on Thursday as the U.S. said import and export prices last month soared above market expectations.
The yield on the 10-year U.S. Treasury note — the key benchmark pricing mortgages, auto loans and credit card debt — rose less than 1 basis point to 4.481%.
The 2-year Treasury note yield, which closely tracks short-term Federal Reserve interest rate policy, was more than 1 basis point higher at 4.009%, above the Federal Reserve's benchmark fed fund rates that stand in a range between 3.50% and 3.75%. The longer-dated 30-year Treasury bond yield declined more than 1 basis point to 5.028%.
One basis point equal 0.01%, and yields and prices move inversely to each another.
April import and export prices hit their highest levels since 2022, the Bureau of Labor Statistics reported Thursday.
"Fed officials are at risk of falling even further behind the curve when it comes to their current inflation fight," said Chris Rupkey, chief economist at FWDBONDS.
Import prices jumped 1.9% for the month, a full percentage point above the March move and higher than the 0.9% Dow Jones consensus forecast. On a 12-month basis, prices rose 4.2%, the most since October 2022.
The rise came in large part from energy-related costs, as prices for fuels and lubricants surged 16.3%. Petroleum and petroleum products prices increased 19%. Nonfuel imports rose 0.8% on higher prices for capital goods, nonfuel supplies and foods and beverages.
On the export side, prices climbed even more, up 3.3%, which put the 12-month increase at 8.8%, the highest since September 2022.
"Nonfuel import prices are surging as the dam has broken and importers cannot hold off any longer in pushing up the price of imported goods," Rupkey said.
On Wednesday, April's producer price index rose 1.4%, the biggest monthly increase since March 2022 and also exceeding economists' 0.5% consensus estimate and the upwardly revised 0.7% March increase. On an annual basis, the index was up 6% — the biggest increase since December 2022.
The report arrived a day after the BLS reported that the consumer price index rose 3.8% from a year ago for the month, as surging energy prices compounded inflation by a surprise jump in shelter costs.
Core inflation was more subdued at 2.8% but still well above the Federal Reserve's 2% goal, likely keeping central bankers on hold as the impacts from the Iran war and President Donald Trump's tariffs play out.
Kevin Warsh was confirmed as the next Fed chair Wednesday, setting him up to succeed Jerome Powell, whose term is scheduled to end Friday.
"Warsh really has his hands full as the economy is holding its own despite the risks and uncertainty of the Middle East war and inflation pressures are springing leaks everywhere we look," Rupkey also said.
— CNBC's Lisa Kailai Han also contributed to this report.