"Treasury Yields Dip Despite December Inflation Data"

The 2-year Treasury yield fell to its lowest level of the month as traders focused on the potential for easing price gains despite a hotter-than-expected U.S. inflation report for December. The 30-year bond auction went fairly well, and the market's narrative about the timing and extent of interest rate cuts from the Federal Reserve remained largely unchanged. The report did little to alter expectations of a quarter-of-a-percentage-point rate cut by March, and the central bank is now mostly expected to deliver six or seven quarter-point rate cuts by December.