Despite a surprisingly soft inflation report and President Donald Trump‘s temporary trade truce, U.S. Treasury yields rose Thursday, suggesting that bond investors remain skeptical of a near-term Fed pivot and are bracing for prolonged policy uncertainty.
The yield on the 30-year Treasury note rose 8 basis points to 4.81%, retracing roughly half of the sharp decline sparked by Trump’s unexpected 90-day tariff pause the day before. Meanwhile, the 10-year yield ticked up 3 basis points to 4.35%, signaling persistent investor wariness despite improving macroeconomic signals.
The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) fell 1.5% at the open.
While falling inflation typically softens yields by boosting rate-cut hopes, bond investors are clearly holding their breath, waiting for a more decisive signal — the so-called “Fed Put” — from the central bank.
Inflation Cools Sharply, But the Fed Stays Quiet
The Consumer Price Index (CPI) dropped more than expected in March 2025, reviving hopes that the Federal Reserve might pivot to rate cuts sooner than anticipated.
Annual inflation fell to 2.4%, the lowest since September 2024, down from 2.8% in February and well below the 2.6% consensus forecast.
Even more striking, monthly inflation contracted by 0.1%, marking the first negative reading since May 2020. Core inflation, which strips out …