The 10-year Treasury yield plummets following the surprise drop in the June CPI.

U.S. Treasury yields fell Thursday as investors assessed the June consumer price index.

The yield on the fell 9 basis points from 4.185% to 4.507%.

Prices and yields move in opposite directions, with one basis point equal to 0.01%.

June's CPI is expected to reflect a 0.1% rise on a monthly basis and 3.1% from a year earlier, according to economists surveyed by Dow Jones. This suggests an easing of inflation as the annual figure came in at 3.3% in May.

The core CPI, excluding food and energy expenses, is projected to rise 0.2% in June compared to the previous month and 3.4% year-over-year.

The central bank has stated that it will not reduce interest rates until there is evidence that inflation is gradually decreasing towards the Fed's target rate of 2%.

This week, Powell's comments on Capitol Hill were also considered by investors as he testified before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday.

He did not specify when interest rates could be cut, but he stated that the central bank did not need to wait until the 2% target was reached before doing so.

The FedWatch tool from CME Group indicated that investors were expecting a more than 71% chance of interest rate cuts in September.