Investors are hoping for a slight decrease in inflation in February's Consumer Price Index report.

From Investing.com: 2025-03-12 02:09:00

Investors are anxiously awaiting February’s Consumer Price Index report, which is expected to show a slight decrease in inflation to a 3.2% year-over-year increase. The stock market has been turbulent, leading to a surge in demand for safe-haven U.S. government debt, resulting in a drop in the 10-year Treasury yield from 4.81% to 4.11%. Despite this, there is a 97.8% probability that the Fed will keep rates steady at its meeting on March 19. The market is on edge ahead of the release of the inflation data, with the S&P 500 index dropping 10% from its record high on February 19.

The technical view on US 10-year Treasury yields shows a rejection of 4.80% in January, forming a double top pattern. Yields are currently at a support zone of 4.10-4.12%, with a potential rebound to 4.40-4.50% before another move lower. Core inflation has remained above 3.2% since August 2024, suggesting that the Fed may need to keep rates unchanged for the next couple of meetings in 2025. The drop in 10-year yields signals expectations of lower interest rates, but history shows that maintaining high inflation levels can lead the Fed to hold rates steady for an extended period.

In conclusion, the unpredictable nature of financial markets should not be underestimated, as highlighted by the quote “The market can remain irrational longer than you can remain solvent” by economist John Maynard Keynes. Ali Merchant, a financial market professional, provides insights into technical analysis, treasury markets, and more through his platform TwT Learnings.



Read more at Investing.com: US CPI Preview: Markets Hope for Signs of Cooling Inflation in February