Investing.com -- The dollar and treasury yields have seen a sharp decline after December's inflation numbers came in softer than expected.
The 12-month Consumer Price Index (CPI) for December was reported at 2.9%, a slight increase from November's 2.7%, according to a Wall Street Journal survey. This figure aligns with the consensus forecast.
The core inflation reading, which excludes volatile items such as food and energy, stood at 3.2%. This was slightly lower than the 3.3% pace that economists projected for December, repeating November's trend.
This alignment with expectations could potentially alleviate concerns that the Federal Reserve might need to adopt a more aggressive stance than it hinted at in December.
Prior to the data release, yields were already on a downward trend, a trajectory that intensified post-release.
Specifically, the 10-year yield fell to 4.692%, while the two-year yield dropped to 4.281%. Concurrently, the Wall Street Journal Dollar Index, a measure of the U.S. dollar's value against a basket of foreign currencies, also experienced a 0.5% decline.
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