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2025-07-31 20:53:42
US inflation rebounded unexpectedly, sending Treasury yields briefly higher before falling again, leaving the market uncertain. ⑴ On July 31st, following the release of US inflation data, Treasury yields briefly narrowed their losses amidst volatile trading. ⑵ This data was slightly higher than market expectations, supporting the Federal Reserve's continued patience on rate cuts. ⑶ Specific data showed that the 10-year Treasury yield briefly narrowed its losses after the data release, currently down 3 basis points to 4.348%. ⑷ The 2-year Treasury yield also briefly narrowed its losses, currently unchanged at 3.932%. ⑸ In addition, better-than-expected US initial jobless claims suggest the labor market hasn't deteriorated sharply, further supporting the Federal Reserve's cautious stance. ⑹ However, the volatility in the Treasury market was short-lived. ⑺ Subsequently, US Treasury yields extended their declines again, with the 10-year yield falling 4.2 basis points to 4.336% and the 2-year yield falling to 3.928%. ⑻ This short-lived rally followed by a subsequent decline reflects the market's mixed emotions regarding inflation and employment data. ⑼ Although the data supports the Fed's patient stance, market views on the economic outlook and future interest rate path remain divided.
