Treasuries Extend Gain on Below-Expectation CPI (Jan 2026)

U.S. Treasuries extended gains on January 2026 CPI data that lagged expectations, suggesting inflation may moderate. The annual rate for the 12-month period rose to 4.2% from 3.9% in December 2025, while the 12-month core PCE price index increased by 4.0%, slightly below the 4.1% expected. The weaker-than-anticipated readings supported a dovish tone in Federal Reserve policy discussions for February. Treasury yields fell, with the 10-year yield closing at 3.82%, down 4bp from the prior day.