The benchmark 10-year U.S. Treasury yield rose slightly on Friday as investors braced for the year’s final Federal Reserve meeting.
The 10-year Treasury yield rose 2 basis points to 4.347%, after rising more than 6 basis points on Thursday to surpass the 4.3% level. Meanwhile, the yield on two-year government bonds also rose 2 basis points to 4.207%.
Yields and prices move in opposite directions, with 1 basis point equaling 0.01%.
The move comes ahead of the Fed’s Dec. 17-18 meeting, with investors overwhelmingly expecting a 0.5 percentage point cut in interest rates.
U.S. inflation data released Thursday showed wholesale prices rose 0.4% in November, beating the 0.2% level expected by economists compiled by Dow Jones. At the same time, a spike in jobless claims hinted at a possible economic downturn, slowing some of the rise in yields.
The two reports were released a day after the Consumer Price Index report for November released on Wednesday showed a 12-month inflation rate of 2.7%, an increase of 0.3% from the previous month. The core inflation rate, which excludes food and energy prices, was 3.3% annually, or 0.3% monthly. All numbers were in line with Dow Jones consensus estimates.
Traders are currently pricing in about a 97% chance of a quarter-point rate cut by the Federal Reserve next week, according to the CME FedWatch tool.
On the data side, import prices for November are expected to be released around 8:30 a.m. ET on Friday.
