A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell on November 26, 2024, in New York City.
Treasury yields fell slightly on Wednesday after November's consumer price index data matched expectations.
The 10-year Treasury yield dipped 2 basis points to 4.21%. The 2-year Treasury declined 5 basis points to 4.10%.
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Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.
The consumer price index showed a 12-month inflation rate of 2.7% after increasing 0.3% on the month, in line with the Dow Jones consensus estimates. Excluding food and energy costs, core CPI was at 3.3% on an annual basis and 0.3% monthly, also matching consensus.
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These inflation insights are some of the last key economic data points due to be released before the Fed's monetary policy meeting next week. The central bank is set to announce its next interest rate decision as well as share guidance about the policy and economic outlook on Dec. 18.
"Overall, the dataset showed further progress on the inflation front and is consistent with a 25 bp cut from the Fed next week," Ian Lyngen, BMO's head of U.S. rates, said in a note.
Traders increased their bets for a rate cut from the Fed next week, pricing in a near 100% chance for a reduction, CME Group's FedWatch tool showed.
Money Report
Investors will not be hearing from Fed policymakers before the rate decision as they are currently in a blackout period which prevents them from giving public remarks ahead of a central bank meeting.
