U.S. Treasury yields rose on Tuesday as investors awaited the latest reading on the consumer price index report.
The benchmark 10-year Treasury yield was nearly 7 basis points higher at 4.278%. The 2-year Treasury yield was last 4 basis points higher at 3.937%, after earlier in the day falling to its lowest level since October.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
The consumer price index report is due Wednesday at 8:30 a.m. ET. Economists polled by Dow Jones expect CPI in February to have risen 0.3% month over month and 2.9% year on year. Core CPI, which strips out food and energy prices, is forecast to have expanded by 0.3% month on month and 3.2% year on year.
The producer price index, another inflation gauge, is due out Thursday. Both readings should shed some light on the health of the U.S. consumer in the wake of recent signs indicating that the economy may be softening.
These readings come ahead of the Federal Reserve’s March meeting, which will take place later this month.
“It’ll be really important that we don’t see an upside surprise on CPI because at this point, the Fed does have plenty of dry powder to step in to cut rates and try to boost demand if the economy were to meaningfully slow. But they can only really do that if they feel that inflation expectations and inflation are well anchored,” said Ross Mayfield, investment analyst at Baird.
Yields also rose after President Donald Trump declared on Truth Social Tuesday morning that tariffs on Canadian steel and aluminum imports would double to 50% from 25%, effective Wednesday. This was in response to the Ontario government’s decision to levy a 25% duty on electricity exports to the U.S.
However, later in the day, Ontario Premier Doug Ford said he was temporarily suspending the 25% surcharge after speaking with U.S. Commerce Secretary Howard Lutnick. White House trade advisor Peter Navarro followed that by telling CNBC Tuesday afternoon that Trump would not raise the Canadian steel and aluminum tariffs to 50%.
On Tuesday afternoon, news also broke that Ukraine has agreed to a 30-day ceasefire, if Russia accepts, in a plan negotiated by the U.S. The United States will immediately resume sharing intelligence and security assistance with Ukraine.
