U.S. Treasury yields moved slightly higher after inflation data came in stronger than expected. The 10-year yield remained around 4.253%, while the 2-year yield ticked up about 2 basis points to roughly 3.732%.
Core inflation, which strips out volatile food and energy prices, rose to 2.7% in May. That was above economists’ forecasts of 2.6% and an increase from April’s 2.5% reading.
The hotter-than-expected inflation report has added pressure to markets already watching political developments. President Trump has stepped up criticism of Federal Reserve Chair Jerome Powell, questioning the Fed’s cautious approach to interest-rate policy amid uncertainty over tariff plans.
Mr. Trump has said he is considering replacements and may announce a successor to Powell as early as September, well before Powell’s term concludes in 2026. Such comments have intensified attention on how fiscal and political shifts could influence monetary policy and market expectations.
Investors will be closely monitoring upcoming economic releases and any signals from the Fed about policy intentions. With core inflation accelerating modestly, markets are weighing whether the central bank will maintain its current stance or adjust rate guidance sooner than expected. For now, yields have responded modestly to the data, reflecting a balance between stronger inflation readings and ongoing uncertainty around policy and geopolitics.