Market Data 
US bond markets had a relatively calm week following the release of March inflation data, which came in below expectations. The limited increase in core inflation, despite energy prices being driven up by the war in Iran, provided short-term relief in the markets.
The yield on the benchmark U.S. 10-year Treasury bond rose slightly to 4.307%. The yield on the more monetary policy-sensitive 2-year bond remained relatively flat at 3.787%. The yield on the long-term 30-year Treasury bond also saw a slight increase, rising to 4.912%.
The March consumer price index (CPI) rose 0.9% on a monthly basis and 3.3% on an annual basis, in line with economists’ expectations. This increase was driven by a 10.9% rise in energy prices. However, core inflation, excluding food and energy items, rose 0.2% monthly and 2.6% annually, 0.1 percentage points below expectations.
While lower-than-expected core inflation data somewhat eased concerns about the impact of tensions in the Middle East on prices, risks remain. Indeed, according to a recent survey published by the University of Michigan, consumer inflation expectations rose sharply in April. The one-year inflation forecast climbed to 4.8%, a significant increase from 3.8% in March and reaching its highest level since August 2025.
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Alexandra Wilson-Elizondo, co-principal investment manager for multi-asset solutions at Goldman Sachs Asset Management, stated that markets were preparing for higher inflation data, and that the current figures provided some relief, albeit limited. However, Wilson-Elizondo noted that the full impact of the conflict in Iran on inflation may not yet be reflected in the data.
Wilson-Elizondo said, “The Fed has both the means and every reason to be patient,” adding, “Today’s figures buy the Fed time, but the real test is ahead.”
Indeed, the personal consumption expenditures (PCE) price index, closely monitored by the Fed, increased by 0.4% monthly and 2.8% annually in February, in line with expectations. These figures indicate that inflationary pressures have not completely disappeared and that a “wait-and-see” approach to monetary policy may be decisive in the coming period.
*This is not investment advice.
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