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U.S. Treasury bonds rise, PPI rises less than expected, supports Fed's aggressive interest rate cuts

U.S. Treasuries rose as a weaker-than-expected U.S. producer price index (PPI) report supported the Federal Reserve's more aggressive efforts to cut borrowing costs this year. Tuesday's gains in Treasuries pushed the yield curve at least 4 basis points lower, with the two-year yield falling about 5 basis points to just below 4% and the 10-year yield falling to around 3.9%. "You can breathe a sigh of relief," Jack McIntyre, portfolio manager at Brandywine Global Investment Management, said after the release of the weak PPI report, which kicked off a series of economic data releases this week. Consumer price and retail sales data will be released on Wednesday and Thursday respectively, which are expected to help investors assess the depth and speed of potential interest rate cuts by the Federal Reserve.

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