Traders work on the floor of the New York Stock Exchange on January 6, 2026 in New York City, USA.
Brendan McDiarmid | Reuters
Benchmark 10-year Treasury yields fell on Tuesday after data showed core U.S. consumer prices rose at a slower rate than expected in December.
The yield on the 10-year U.S. Treasury fell more than 1 basis point to 4.175%, after hitting 4.156%, its lowest level since Jan. 8. The two-year bond yield also fell by more than 1 basis point to 3.528%, after falling to 3.499%, its lowest level since January 9th. The 30-year Treasury yield fell less than 1 basis point to 4.832%.
One basis point equals 0.01%, and yields and prices move in opposite directions.
Core inflation, which excludes volatile food and energy prices, rose 0.2% on a monthly basis and 2.6% on an annual basis. Both were 0.1 percentage points below the Dow Jones forecast.
In the same month, the consumer price index recorded an increase of 0.3%, and the main annual rate of all items was 2.7%. Both were exactly in line with the Dow Jones consensus forecast.
“Inflation is still relatively high, but it’s trending down,” said Kyler Weinand, chief investment officer at Regan Capital. “The recent positive jobs report, rising inflation, persistently high prices, and political noise will keep the Fed out of the picture until at least the spring.”
Markets were closely watching the December employment report, which showed that the labor market was cooling slowly but remained resilient, increasing expectations that the Federal Reserve would delay interest rate cuts. Futures markets are currently pricing in a two-quarter point rate cut starting in June of this year, according to the CME FedWatch tool.
Federal Reserve Chairman Jerome Powell announced Sunday night that the Justice Department has opened a criminal investigation against him over his $2.5 billion renovation of the central bank’s Washington headquarters.
Chairman Powell warned that the results of the investigation would shape the central bank’s future decisions.
