Treasury yields dip as Wall Street awaits wholesale inflation data

U.S. Treasury yields dipped early Thursday as Wall Street digested the inflation print for July and looked ahead to further readings due later in the session. 

The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — fell over one basis point to 4.674%.

The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, fell over 2 basis points to 4.176%. The longer-dated 30-year Treasury bond yield fell one basis point to 5.236%.

One basis point equals 0.01%, and yields and prices move inversely to one another. 

The July reading of the U.S. producer price index, which gauges what wholesalers pay for raw goods and materials, is set for release Thursday at 8:30 a.m. ET. Economists polled by Dow Jones expect an increase of 0.2% from the prior month.

"We think that most FOMC voters would see the July inflation numbers we expect as acceptable and would want to see the August CPI and PPI before deciding whether to hike at the September meeting," Goldman Sachs wrote in a note Thursday.

The PPI report comes a day after an in-line reading on the consumer price index.

CPI for July increased by 0.1% month over month, matching expectations. Traders pared back bets on a Federal Reserve rate hike in September in response.

"It was all in-line with consensus but that still makes it two consecutive relatively encouraging core inflation reports and, when combined with last week's weaker employment data, leaves less pressure on the Fed to act immediately in September," Deutsche Bank's Jim Reid wrote in a note on Thursday.

— CNBC's Fred Imbert also contributed to this report.

Reporting from CNBC contributed to this story.