U.S. Treasury yields plunge after hot CPI print as investors await more economic data

A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., Sept. 16, 2026. Jeenah Moon | Reuters U.S. Treasury yields declined on Thursday as investors awaited more economic data, after September's consumer price inflation reading came in stronger than expected in the previous session.

The benchmark 10-year Treasury yield last fell 9 basis points to 5.099%, while the 30-year Treasury bond yield was down over 8 basis points to 5.439%. The 2-year Treasury note yield was 6 basis points lower to 4.74%. One basis point is equal to 0.01%, and yields and prices move in opposite directions.

Investors are digesting the CPI print for September, released on Wednesday, which came in hotter than forecast. The consumer price index , a measure of goods and services costs across the U.S. economy, rose 0.6% monthly and 3.7% on an annual basis, per the Bureau of Labor Statistics. Economists surveyed by Dow Jones expected gains of 0.6% and 3.6%, respectively.

Core inflation, which excludes volatile food and energy prices, rose 0.3% monthly and 2.6% annually, compared with estimates of 0.2% and 2.5%. The print was already expected to be strong due to soaring energy prices, with gasoline costs up 9.1% and accounting for half of the gain in headline CPI. The energy index also jumped 5.2%.

Investors will now await the producer price index, retail sales data for September and weekly initial jobless claims figures, all due later in the session. The data comes just two weeks before the central bank's next interest rate decision, and, according to Deutsche Bank analysts, speculation of a rate hike rose after its release. "But after the CPI print came out, that then surged to an intraday peak of 58%, and it spent around half an hour above the 50% mark," the analysts said in a note on Thursday.

However, fears around AI and tightening in credit conditions saw this unwind quickly, with traders now pricing in only a 31% chance of a rate cut at the next meeting, according to the CME FedWatch Tool .

Source: CNBC