Treasury yields fell slightly on Wednesday as investors awaited the Federal Reserve’s latest interest rate decision and guidance on the outlook for monetary policy and the U.S. economy.
The yield on the 10-year Treasury dipped 2 basis points to 4.176%. The 2-year Treasury yield was last down by 3 basis points to 4.688%.
Yields and prices have an inverted relationship. One basis point equals 0.01%.
The Fed is widely expected to keep interest rates unchanged at the conclusion of its policy meeting on Wednesday. That would be the third time in a row that rate would be held steady.
Many investors are also hoping that the Fed will provide hints about the path for interest rates, including when it may cut rates. Policymakers have so far given few hints about this, though Fed Chairman Jerome Powell earlier this month suggested it was too soon to speculate about rate cuts.
Bond yields traded lower after wholesale prices provided another piece of positive inflation news. The producer price index was unchanged for the month, against the Dow Jones estimate for a 0.1% increase.
Excluding food and energy, the index also was flat versus the forecast for a 0.2% increase. Excluding food, energy and trade services, the PPI rose 0.1%. On a year over year basis, the headline index was up just 0.9%; excluding food, energy and trade, it increased 2.5%.
Data released on Tuesday showed the consumer price index increased by 0.1% on a monthly and 3.1% on an annual basis in November. Economists previously surveyed by Dow Jones were expecting the CPI to be flat month over month, while the annual increase was in line with expectations.
The core CPI, which excludes food and energy prices, came in 0.3% higher than the previous month and was up by 4% from a year earlier.
