Market Reacts to Steady CPI

In a surprising turn of events, the yields on short-term bonds in the United States experienced a notable drop this Tuesday. This movement came on the heels of the latest inflation data release, which indicated that the consumer price index (CPI) maintained a steady rise of 2.7% in July, mirroring June's figures and coming in lower than anticipated.

Impact on Treasury Yields

The data seemed to alleviate some of the market's concerns regarding the potential economic repercussions of ongoing trade tariffs. Specifically, the two-year bond yield saw a decrease of 3.1 basis points, settling at 3.718% by 8:46 am ET. Similarly, the five-year Treasury yield wasn't far behind, losing 2.4 basis points to reach 3.798%.

Longer-Term Bonds Show Mixed Responses

Meanwhile, the yield on the 10-year note experienced a slight decline of 0.8 points, landing at 4.265%. In contrast, the 30-year yield bucked the trend, adding 0.8 points to climb to 4.847%. This mixed response across different maturity bonds highlights the nuanced market reaction to the latest inflation insights.