NEW YORK, Sept 13 (Reuters) - U.S. Treasury yields across maturities dropped to session lows on Thursday morning after data showing U.S. consumer prices rose less than expected in August, raising questions about the Federal Reserve’s pace of interest rate hikes.
The Labor Department said its consumer price index increased 0.2 percent last month after a similar gain in July, as increases in gasoline and rent were offset by declines in healthcare and apparel costs, and underlying inflation pressures also appeared to be slowing.
The Fed is widely expected to raise interest rates at its policymaking meeting in September, but a fourth rate hike in December remains an open question that depends, in part, on where inflation falls in relation to the central bank’s 2 percent target.
The yield on the two-year note fell to 2.740 percent from a high of 2.773 earlier in the day. The 10-year note yield was last at 2.952, down from a session high of 2.983 percent. (Reporting by Kate Duguid; Editing by Bernadette Baum)