NEW YORK, April 18 (Reuters) - U.S. Treasury yields continued to move higher on Thursday as investors weighed economic data and warnings from Federal Reserve officials that the decline in inflation may have stalled.
Yields have jumped near five-month highs this week following stronger-than-expected inflation data last week. Markets are now pricing in a total of 42 basis points in cuts by the end of this year, down from more than 160 basis points in cuts expected in January, and now see the first cut coming in September, according to CME's FedWatch Tool.
The number of Americans filing new claims for unemployment benefits was unchanged last week, the Labor Department said Thursday, pointing to continued labor market strength. Initial claims for state unemployment benefits remained at a seasonally adjusted 212,000 for the week ended April 13. Economists polled by Reuters had forecast 215,000 claims in the latest week.
Federal Reserve officials have noted the continued strength of the US labor market as a reason to delay cutting interest rates to avoid a re-acceleration of inflation.
Cleveland Federal Reserve Bank President Loretta Mester said on Wednesday that she wants to see more confidence that inflation is easing before the central bank begins cutting rates.
"At some point, as we get more confidence, we will start to normalize policy back to a less restrictive stance, but we don't have to do that in a hurry," Mester said.
Fed Governor Michelle Bowman warned in a separate speech on Wednesday that "Progress on inflation has slowed, and ... maybe it is even stalled at this point."
The yield on 10-year Treasury notes was up 2.5 basis points to 4.610%. The yield on the 30-year Treasury bond was up 2 basis points to 4.719%.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 2.4 basis points at 4.956%.
(Reporting by David Randall; Editing by Sharon Singleton)
