The yield on the US 10-year Treasury fell to 4.07% on Friday, the lowest level since early December, after a softer-than-expected CPI report reinforced expectations of Federal Reserve rate cuts this year. The annual headline inflation rate slowed to 2.4% last month, down from 2.6% in each of the previous two months and below forecasts of 2.5%. On a monthly basis, inflation eased to 0.2%, compared with expectations that it would remain steady at 0.3%. Following the data, traders increased their expectations for Federal Reserve easing this year to 61bps, up from 58bps previously. The probability of a rate cut at the April meeting rose, while pricing for December indicates roughly even odds between a rate reduction and a hold. Markets continue to assign the highest probability to a 25bps cut in June, followed by another in September. For March, investors largely expect the Fed to leave interest rates unchanged.