Treasury Yields Dip

Published September 12, 2025

U.S. Treasury yields fell as investors reacted to the latest U.S. inflation reports. Yields continued to decrease midweek as the latest employment figures indicated a weakening labor market, which suggested that the Federal Reserve is likely to lower interest rates next week.

On Thursday, the U.S. Bureau of Labor Statistics announced that the consumer price index (CPI), which measures the cost of dozens of everyday consumer goods, increased 0.4% in August. This was double the July growth and exceeded analysts’ expectations of a 0.3% gain. The CPI rose to 2.9% year-over-year, in line with analyst’s expectations.

“Today's CPI report has been trumped by the jobless claims report,” said chief global strategist at Principal Asset Management, Seema Shah. "While the CPI report is a tad hotter than expected, it will not give the Fed a moment of hesitation when they announce a rate cut next week."

The benchmark 10-year Treasury note yield opened the week of September 8 at 4.08% and traded as low as 4.00% on Thursday. The 30-year Treasury bond opened the week at 4.76% and traded as low as 4.64% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased by 27,000 to 263,000 for the week ended September 6, above analysts’ expectations of 235,000. Continuing unemployment claims totaled 1.94 million, unchanged from the prior week.

“Inflation remains hotter than hoped, but the Fed's focus is jobs,” said chief international economist at ING, James Knightley. “On the face of it, this hints at a pick-up in the pace of layoffs in an environment of already weak hiring and will reaffirm expectations of a 25-bp (basis point) Fed rate cut next week.”

The 10-year Treasury note yield finished the week of 9/8 at 4.07%, while the 30-year Treasury note yield finished the week at 4.68%.