Traders work on the floor at the New York Stock Exchange in New York City, U.S., Jan. 6, 2026.
Brendan McDermid | Reuters
The benchmark 10-year Treasury yield fell on Tuesday as data showed core U.S. consumer prices rose less than predicted in December.
The 10-year Treasury yield dipped 1 basis point to 4.177% after hitting a low of 4.156%, its lowest level since Jan. 8. The 2-year yield also moved 1 basis point lower to 3.537% after falling to 3.499%, the lowest level since Jan. 9. The 30-year yield fell less than a basis point to 4.833%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
Core inflation, which excludes volatile food and energy prices, showed a 0.2% gain on a monthly basis and 2.6% annually. Both were 0.1 percentage point below Dow Jones expectations.
The consumer price index posted an increase of 0.3% for the month, putting the headline all-items annual rate at 2.7%. Both were exactly in line with the Dow Jones consensus estimate.
“Inflation is still relatively high, but trending downward,” said kyler Weinand, chief investment officer at Regan Capital. “Recent positive employment data, elevated inflation, sticky price levels and political noise will keep the Fed at bay through at least the spring.”
Markets were closely watching the data after December’s jobs report pointed to a labor market that is cooling modestly but remains resilient, reinforcing expectations that the Federal Reserve will delay interest-rate cuts. Futures markets currently price in two quarter-point cuts this year beginning in June, according to the CME FedWatch tool.
Federal Reserve Chair Jerome Powell said on Sunday evening that the Justice Department has opened a criminal investigation into him over the $2.5 billion renovation of the central bank’s Washington headquarters.
Powell warned that the outcome of the investigation will determine the future of the central bank’s decisions.