Bond yields slide as cooler core inflation boosts bets on slower Fed tightening
U.S. Treasuries rallied after December's core inflation rose 0.2% month-on-month and 2.6% year-on-year, slightly below expectations, driving the 10-year yield down to about 4.175% (hit 4.156% intraday) while the 2-year slid to roughly 3.528% and the 30-year to 4.832%. Markets price in two 25-basis-point Fed cuts this year beginning in June as inflation trends decline and the labor market slows, though larger policy moves depend on ongoing data and the DOJ investigation into Powell’s renovations, which he says could influence the central bank’s decisions.
