Fed’s inflation easing drives Treasury yields lower amid CPI data

Published 11/06/2025, 13:54
Fed’s inflation easing drives Treasury yields lower amid CPI data

Investing.com -- U.S. Treasury yields dropped after new inflation data showed consumer prices rose at a slower pace than expected in May, easing concerns about tariff-driven inflation.

The Consumer Price Index (CPI) increased 0.1% in May, down from April’s 0.2% rise and below what economists had anticipated. The 12-month inflation rate came in at 2.4%, matching the Wall Street Journal consensus forecast and slightly up from April’s 2.3%.

Core CPI, which excludes volatile food and energy prices, remained steady at 2.8% year-over-year, below the 2.9% rate analysts had predicted.

Treasury yields fell sharply following the inflation report release. The benchmark 10-year Treasury yield declined to 4.445%, while the two-year Treasury yield dropped to 3.957%.

The softer inflation reading comes as the U.S. government prepares for a 10-year Treasury auction that market participants will watch closely for any signs of weakening demand.

In parallel developments, the U.S. government has highlighted a trade agreement with China, though specific details were not provided in the report.

The milder-than-expected inflation figures may ease concerns about potential price increases that some feared could result from tariff policies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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