U.S. Treasury yields were higher Wednesday, a sign of relief after a softer inflation report eased some concerns about the economy.

The benchmark 10-year Treasury yield rose 4 basis points to 4.328%. The 2-year Treasury yield rose more than 5 basis points to 3.999%, after falling to its lowest level since October on Tuesday morning.

One basis point is equal to 0.01% and yields and prices move in opposite directions.

The February consumer price index came in softer than expected, rising a seasonally adjusted 0.2% from January, putting the annual inflation rate at 2.8%, according to the Labor Department. Economists surveyed by Dow Jones were looking for gains of 0.3% and 2.9% on a monthly and yearly basis, respectively.

Core CPI, which removes volatile food and energy prices, rose 0.2% on the month and gained 3.1% on a 12-month basis. That’s lower than expectations of a 0.3% monthly increase, and a 3.2% yearly rise.

The data eased immediate concerns that the economy might fall into stagflation — in which slower or no growth is coupled with higher inflation — at a time when investors have been increasingly fearful of the impact tariffs could have on the broader U.S. economy.

The bond market in recent weeks has increasingly priced in fears of slowing growth, with the 10-year U.S. Treasury yield falling to around 4.1%, down from about 4.8% in January.

“Today’s inflation reading should help reduce investor concern about stagflation modestly,” wrote Scott Helfstein, head of investment strategy at Global X. “But the Fed is in a tricky situation as expectations for economic growth are slowing and consumer inflation expectations remain elevated.”

The market was last pricing in the likelihood of three quarter-point rate cuts coming this year, according to the CME FedWatch Tool. The Fed’s current benchmark lending rate has stood at 4.25% to 4.50% since December.

Investors Wednesday are closely monitoring the latest tariff announcements from the White House after President Donald Trump’s 25% tariffs on steel and aluminum went into effect early Wednesday. Europe imposing a counter-tariff on 26 billion euros ($28 billion) worth of U.S. goods from April in response.

They’re also awaiting clarity on the state of Canadian steel and aluminum tariffs following the latest back and forth. Trump on Tuesday announced that he would double import duties to 50%, in response to Ontario’s earlier decision to add a 25% levy on electricity exported to the U.S.

Looking forward, investors will next monitor the February producer price index, set for release Thursday morning.

— CNBC’s Jeff Cox and Alex Harring contributed to this report.