FX.co ★ US Treasury Yields Edge Down, CPI Eyed

On Monday, the yield on the US 10-year Treasury note declined to 4.26%, following a recent peak from last week. This shift comes as traders anticipate potential Federal Reserve rate cuts later this year, in advance of the upcoming US Consumer Price Index (CPI) report. Analysts predict a 0.2% rise in inflation for July, compared to a 0.3% increase in June. Meanwhile, the annual inflation rate is expected to climb for the third consecutive month to 2.8%, with core CPI forecasted to rise by 0.3%. Despite persistent inflationary pressures, the market currently estimates an 88% likelihood of a 25 basis point rate cut by the Fed next month, and has already accounted for an additional reduction by the end of the year. Traders will be closely monitoring forthcoming economic indicators, such as the Producer Price Index (PPI), retail sales, and industrial production, for further insights into the US economic landscape, as well as any potential modifications in Federal Reserve board composition or political influences from the US government.