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U.S. Treasury yields rose on Tuesday as investors positioned themselves ahead of Wednesday’s Consumer Price Index (CPI) report. The 10-year Treasury yield climbed nearly 7 basis points to 4.278%, while the 2-year yield edged 4 basis points higher to 3.937% after briefly touching its lowest level since October.
Market participants are closely monitoring the February CPI report, with economists forecasting a 0.3% month-over-month increase and a 2.9% annual rise. Core CPI, which excludes volatile food and energy prices, is expected to rise 3.2% year over year. Thursday’s Producer Price Index (PPI) release will provide further insight into inflation trends, influencing expectations for the Federal Reserve’s policy decision later this month.
Geopolitical and Trade Developments Add Uncertainty
Global events also weighed on market sentiment. President Donald Trump announced plans to double tariffs on Canadian steel and aluminum imports to 50% following Ontario’s decision to impose a 25% duty on U.S. electricity exports. However, later developments saw Ontario temporarily suspending its surcharge, prompting Trump to indicate a potential tariff reduction.
Meanwhile, Ukraine signaled willingness to agree to a 30-day ceasefire if Russia accepts, following negotiations mediated by the U.S. This development led to renewed U.S. security assistance and intelligence sharing with Ukraine, adding geopolitical complexity to market dynamics.
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