FX.co ★ US 10-Year Yield Retreats Following CPI Data

The yield on the U.S. 10-year Treasury note dropped beneath 4.43% on Tuesday following June's Consumer Price Index (CPI) data, which revealed that core inflation increased less than anticipated for the fifth consecutive month. The yearly inflation rate rose to 2.7% in June, up from 2.4% in May, aligning with predictions. The monthly CPI saw a 0.3% uptick—the most substantial increase in five months—which also met expectations. Core inflation escalated to 2.9% annually, marginally under the projected 3%, with a 0.2% monthly core CPI increase, falling short of the expected 0.3%. Interest-rate futures indicate a minimal probability of an interest rate reduction this month; however, a 25 basis point cut in September appears probable. Federal Reserve Chair Jerome Powell indicated that rising inflation during this summer might result from tariffs, suggesting that rate cuts could be deferred. President Trump criticized Powell for not reducing rates while expressing a willingness to engage in tariff discussions with the European Union, simultaneously cautioning of potential 100% tariffs on Russia if a peace agreement concerning Ukraine is not reached within 50 days.