Drastic fall in US Treasury Yields following November CPI data

14 Dec 2022 , 08:35 AM

After the release of November inflation data indicating a hardly noticeable increase in U.S. consumer prices in November, U.S. Treasury yields fell substantially.

Benchmark U.S. Treasury 10-year note rates, which move counter-cyclically to prices, fell by around 15 basis points immediately following the release of the data before rising to about 3.5%, which is still about 7 basis points below where they were before the announcement.

Two-year rates dropped by over 15 bps before rising to 4.26%, which is still 9 bps below where they were before the release.

After rising by 0.4% in October, the consumer price index grew by 0.1% last month, according to data released on Tuesday by the Labor Department. Reuters questioned economists who predicted a 0.3% increase in the CPI.

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