Yields on the 10-year Treasury note rose on Friday as investors looked ahead to the Federal Reserve’s final meeting of the year.
The 10-year Treasury yield rose more than 7 basis points to 4.401% after jumping more than 6 basis points on Thursday to surpass the 4.3% level. Meanwhile, the two-year maturity government bond yield also rose more than 6bp to 4.247%.
Yields and prices move in opposite directions, with 1 basis point equaling 0.01%.
The move comes ahead of the Federal Reserve’s December 17-18 meeting, where investors are overwhelmingly expecting a quarter-point rate cut.
U.S. inflation data released Thursday showed wholesale prices rose 0.4% in November, higher than the 0.2% expected by economists polled by Dow Jones. At the same time, a surge in jobless claims data potentially signals a weakening economy that has slowed some of the growth in yields.
The two reports come a day after the November consumer price index report released Wednesday showed the 12-month inflation rate at 2.7% and the monthly increase at 0.3%. Core inflation, excluding food and energy prices, averaged 3.3% per year and 0.3% per month. All numbers were in line with Dow Jones consensus estimates.
Traders currently see a roughly 97% chance of a quarter-point rate cut at next week’s Fed meeting, according to the CME FedWatch Tool.
