The 10-year Treasury yield held steady on Tuesday as investors assessed a softer-than-anticipated increase in December wholesale prices and awaited the release of consumer inflation data.

The 10-year yield dipped by about 2 basis points to 4.782%, retreating from its recent 14-month peak. Meanwhile, the 2-year yield fell 4 basis points to 4.363%. A basis point equals 0.01%, with yields and prices moving inversely.

Tuesday’s yield decline followed the producer price index’s modest 0.2% gain in December, undercutting economists’ 0.4% forecast. This fueled hopes for reduced inflationary pressures, easing concerns over limited Federal Reserve rate cuts in 2025.

Last week, U.S. bond yields surged after a stronger-than-expected jobs report reinforced expectations of cautious Fed rate reductions.

The Federal Reserve’s next meeting on January 28-29 is expected to maintain current rates, with CME’s FedWatch tool indicating a 97% likelihood of a rate hold.

Investors now focus on Wednesday’s consumer price index, which could shape the outlook for monetary policy.