Treasury yields (^FVX, ^TNX, ^TYX) have pulled back from the 5% mark in response to the latest inflation data. The Consumer Price Index (CPI) for December showed prices rose as expected, while core CPI increased at a slower-than-expected rate.
George Catrambone, head of fixed income and trading at DWS Group, says the CPI reading is “a sigh of relief” for the bond market, leading to an immediate rally in treasuries. He believes this indicates the Federal Reserve (Fed) may not raise interest rates further. The Fed’s decision on future rate hikes will be crucial in determining Treasury yields.
The news has sparked hope among investors, who are now watching for signs of stability in inflation indicators. This relief could lead to a sell-off of investor disappointment and potentially calm market sentiment.
Source: https://finance.yahoo.com/video/fresh-inflation-data-sigh-relief-145135572.html