Consumer Price Index (CPI) releases may be becoming less important to bond market yield movements, as noted by a Bloomberg report. If so, that would be a reversion to activity before the Global Financial Crisis.

As is true in other markets, bond traders like predictability. Not that volatility is inherently bad. Without it, there are typically only chances to profit in small amounts on trades. Bond traders on the other hand react to clues about perceived movements of the economy in the future. Sudden shifts can be disconcerting when no one knows what is happening.

The Bloomberg story said that changes in the $29 trillion Treasury market bonds have slowed over time. From about August 2022 to mid-2024, the average yield move on the two-year Treasury shifted from five-to10 basis points after CPI changes. Over the last five months, that dropped to four basis points. After the recent CPI report came out on Wednesday, the 2-year Treasury increased by about 1 basis point that afternoon, according to the report. Data from the Treasury Department showed the 2-year flat between the close of Tuesday and Wednesday — both days were at 4.15%.