Yield on the benchmark 10-year Treasury note moved 7 basis points lower to trade at 3.02%. Yields move inversely to prices. Core personal consumption expenditures price index, the Fed's preferred inflation measure, rose 4.7% in May. That's 0.2 percentage points less than the month before, but still around levels last seen in the 1980s.

The Chicago PMI, which tracks business activity in the region, came in at 56, slightly below a StreetAccount estimate of 58.3. The index was expected to show a year-over-year increase of 4.8%. Fed Chairman Jerome Powell said that policymakers would not allow inflation to take hold of the U.S. economy over the longer term.

"The bigger mistake to make... would be to fail to restore price stability," he says. "The way to do that is to slow down growth, ideally keeping it positive," he adds. "Is there a risk that would go too far? Certainly, there's a risk. I wouldn't agree that it's the biggest risk"
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