Treasury Yields Rise as Softer Inflation Data Eases Economic Concerns

Treasury yields rose Wednesday after milder-than-expected inflation data eased concerns about economic stagnation. The 10-year yield increased by 4 basis points to 4.328%, while the 2-year yield rose over 5 basis points to 3.999%.

February’s Consumer Price Index showed a 0.2% monthly increase (2.8% annual rate), below economists’ forecasts of 0.3% monthly and 2.9% annually. Core CPI also came in lower at 0.2% monthly and a 3.1% annual rate. This cooler inflation reduced immediate stagflation worries amid concerns about tariff impacts.

Goldman Sachs analyst Kay Haigh suggests the Fed will likely keep rates at 4.25%-4.50% this month, but may soon resume cutting rates as inflation eases while growth risks increase. Markets are also monitoring tariff developments, including Trump’s 25% steel and aluminum tariffs, Europe’s counter-tariffs on $28 billion of U.S. goods, and the suspended plan to double Canadian import tariffs.