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CPİ News Today- Treasury Yields Tumble After Soft CPI Report
CPİ News Today– Moves in the U.S. stock market remained relatively calm on Wednesday, with major indexes showing little change. However, government bonds and oil markets experienced significant shifts driven by fresh inflation data and rising geopolitical concerns.
Bond rally follows cooler-than-expected inflation numbers
Government bonds surged following the release of the latest Consumer Price Index (CPI) data. The yield on the 10-year Treasury note dropped to 4.413%, down from 4.472% in the previous session. Lower yields indicate higher bond prices, as investors adjusted their expectations around future interest rates.
Inflation data in focus
According to the report released Wednesday morning, annual inflation rose slightly to 2.4% in May, up from 2.3% in April, aligning with economists’ forecasts reported by The Wall Street Journal.
However, monthly inflation came in softer, at just 0.1%, falling short of market expectations. In addition, the core CPI—which excludes volatile food and energy prices—also showed weaker-than-expected increases on both a monthly and yearly basis.
These numbers hint that inflationary pressure may not be as persistent as previously feared, potentially influencing future Federal Reserve policy.
Political pressure mounts on the Federal Reserve
In reaction to the inflation report, former President Donald Trump reiterated his position on monetary policy. “The Fed needs to cut rates by a full percentage point,” he stated, advocating for lower borrowing costs to boost the economy.
Vice President JD Vance echoed Trump’s sentiment, sharply criticizing the central bank: “It’s monetary malpractice not to cut rates when inflation is clearly under control.”
Although the Federal Reserve maintains its independence, growing political pressure could shape public sentiment and influence market behavior.
Oil prices spike amid Middle East concerns
“While activity in the equities market remained relatively subdued and U.S. Treasury yields experienced a noticeable decline, the energy sector moved sharply in the opposite direction, drawing significant attention from investors. U.S. crude oil prices surged by an impressive 4.9%, climbing to $68.15 per barrel by the end of the trading session. This marked the most significant single-day percentage gain for U.S. crude futures since October 3, highlighting the heightened volatility and geopolitical sensitivity within global energy markets.
Embassy evacuation raises alarm
The surge followed reports that the U.S. government was preparing to partially evacuate its embassy in Iraq, citing escalating regional security threats. Such developments often lead to fears of potential supply disruptions in oil-producing regions, prompting swift reactions in global oil markets.
Trade negotiations resume between U.S. and China
Investors also kept a close eye on developments in international trade. Late Tuesday, negotiators from the U.S. and China announced that they had agreed on a new framework to restart trade talks, effectively reviving the previous month’s agreement to reduce certain tariffs.
Tariffs to remain for now
Although recent negotiations between the United States and China have shown signs of improvement and a renewed willingness to cooperate, the sweeping tariffs originally implemented under the Trump administration are not going away anytime soon. Despite the progress in diplomatic discussions, these tariffs—covering a wide range of goods and affecting global trade flows—will remain in effect for at least the next two months.
This continuation comes after a federal appeals court made the decision to uphold the existing tariff policy until July 31. On that date, the court is scheduled to hear additional legal arguments that will determine whether the tariffs should be extended further, modified, or potentially repealed. Until then, the existing duties imposed on imports will stay in place, maintaining a level of uncertainty for businesses and investors closely watching the outcome of the case.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
