FX.co ★ Treasury Yields Rise

The yield on the US 10-year Treasury note initially decreased before recovering to trade slightly higher at approximately 4.47% on Tuesday. This movement occurred as investors evaluated the recent Consumer Price Index (CPI) report. Both the annual and monthly headline inflation figures met expectations, while core inflation was softer than anticipated. This suggests that underlying price pressures, particularly those related to recently imposed tariffs, remain muted for the time being. In response to this data, traders marginally adjusted their expectations for interest rate cuts, although markets continue to anticipate two reductions in the federal funds rate by the end of the year. Nevertheless, Federal Reserve Chair Jerome Powell warned that inflation might increase during the summer due to tariff effects, indicating potential delays in rate cuts. As we look ahead, forthcoming Producer Price Index (PPI) and retail sales data scheduled for release later this week will provide further insight into the US economy's health.