Market Awaits Fed Inflation Data as Treasury Yields Hold Steady

US Treasury yields remained largely unchanged, with the 30-year yield inching up marginally to 4.927%, while the 10-year and 2-year yields held at 4.422% and 3.939% respectively. Despite the calm surface, underlying market tensions persist as investors brace for the Federal Reserve’s preferred inflation gauge—the PCE index—due Friday.

The TRUMP administration’s aggressive tariff push adds another layer of uncertainty. A federal appeals court temporarily upheld reciprocal tariffs, but officials are reportedly preparing backup measures under the Trade Act of 1974 that could impose temporary 15% tariffs for up to 150 days. This comes amid existing concerns about inflation risks, weak economic data, and growing deficit fears.

All eyes now turn to the PCE release for signs of slowing inflation and consumer spending. Market pricing currently suggests about 50 basis points in rate cuts by December, but Treasuries remain in holding pattern until clearer signals emerge from the Fed.