US Treasury Yields Fall After Soft CPI Report

2026-02-13 13:47 By Joana Taborda 1 min. read

The yield on the US 10-year Treasury fell to 4.07% on Friday, the lowest level since early December, after a softer-than-expected CPI report reinforced expectations of Federal Reserve rate cuts this year.

The annual headline inflation rate slowed to 2.4% last month, down from 2.6% in each of the previous two months and below forecasts of 2.5%.

On a monthly basis, inflation eased to 0.2%, compared with expectations that it would remain steady at 0.3%.

Following the data, traders increased their expectations for Federal Reserve easing this year to 61bps, up from 58bps previously.

The probability of a rate cut at the April meeting rose, while pricing for December indicates roughly even odds between a rate reduction and a hold.

Markets continue to assign the highest probability to a 25bps cut in June, followed by another in September.

For March, investors largely expect the Fed to leave interest rates unchanged.

US bond markets are closed on Monday for the Presidents' Day holiday.



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US Treasury Yields Fall After Soft CPI Report
The yield on the US 10-year Treasury fell to 4.07% on Friday, the lowest level since early December, after a softer-than-expected CPI report reinforced expectations of Federal Reserve rate cuts this year. The annual headline inflation rate slowed to 2.4% last month, down from 2.6% in each of the previous two months and below forecasts of 2.5%. On a monthly basis, inflation eased to 0.2%, compared with expectations that it would remain steady at 0.3%. Following the data, traders increased their expectations for Federal Reserve easing this year to 61bps, up from 58bps previously. The probability of a rate cut at the April meeting rose, while pricing for December indicates roughly even odds between a rate reduction and a hold. Markets continue to assign the highest probability to a 25bps cut in June, followed by another in September. For March, investors largely expect the Fed to leave interest rates unchanged. US bond markets are closed on Monday for the Presidents' Day holiday.
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