The 10-year Treasury yield was little changed Wednesday as investors assessed a key inflation reading that came in as expected.
Thank you for reading this post, don't forget to subscribe!The yield on the 10-year Treasury climbed less than 2 basis point to 4.451%. The 2-year Treasury yield fell about 7 basis points to 4.275%.
One basis point is equal to 0.01%. Yields and prices move in opposite directions.
Treasurys
Those moves come after the October consumer price index, which measures the cost of a basket of goods and services, showed an uptick in the annual inflation rate but nevertheless came in line with expectations. The reading increased 0.2% and 2.6% on a monthly and yearly basis, respectively.
Core CPI, which excludes volatile food and energy prices, gained 0.3% for the month and was at 3.3% annually, also as expected.
The tame inflation print puts the Federal Reserve on course to lower interest rates next month, with markets last pricing in a 79% likelihood of a quarter-percentage-point cut, according to the CME FedWatch Tool.
“Overall, it was a remarkably consensus print that leaves a December cut as the most likely outcome,” wrote Ian Lyngen, head of U.S. rates strategy on the BMO Capital Markets Fixed Income Strategy team.
Bond yields soared last week after President-elect Donald Trump’s victory, with expectations that his pro-business policies and tax cuts could boost economic growth. However, economists also expect that these policies could result in higher inflation.
Investors will also look to the producer price index data for October, which will be published Thursday. Fed Chair Jerome Powell will deliver a speech later in the week, which investors will monitor closely for clues about future monetary policy. Data on retail sales and industrial production will also be published Friday.
— CNBC’s Jeff Cox and Yun Li contributed to this report.
