Treasury Yields Fall After US Inflation Comes In Cooler Than Forecast in March

• U.S. Treasury yields fell Wednesday after the release of new inflation figures, as traders bet the Federal Reserve would halt rate increases sooner than expected. The 10-year Treasury note yield fell 3 basis points to 3.41%, while the 2-year Treasury rate slid 6 basis points to 4.0%.
• Minutes from the March Federal Open Market Committee meeting released Wednesday showed the central bank expects a recession this year on the turmoil in the banking sector stemming from the collapse of Silicon Valley Bank.
• “Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years,” the meeting summary said.
• Meanwhile, the consumer price index rose 0.1% in March on a month-over-month basis. Economists expected an increase of 0.2%, according to Dow Jones. Year over year, the CPI rose 5% while economists had forecast a 5.1% advance. That year-over-year figure is also lower than the 6% jump seen in February. Core CPI, which strips out food and energy prices, rose 0.4% month over month.
• The Fed’s next interest rate decision in May is likely to be impacted by the fresh inflation figures. The central bank noted after its last meeting that a rate hike pause could be on the horizon if data showed sufficient signs that the economy is cooling.

(Source: CNBC)