"Treasury Yields React to December Inflation Data and CPI Outlook"

U.S. Treasury yields fell despite higher-than-expected December inflation, as the 10-year yield dropped over 6 basis points and the 2-year yield shed more than 11 basis points. The Federal Reserve's plan for small rate cuts this year faces uncertainty, with some investors hoping for earlier and more aggressive cuts. The latest inflation report challenges expectations for rate cut timing, but does not provide a strong impetus for the Fed to act quickly.