NEW YORK: US Treasuries prices trimmed earlier gains on Wednesday as an unexpected fall in domestic consumer prices in December raised expectations Federal Reserve would slow its pace of rate hikes further and might allow long-term inflation to drift higher.
Inflation risk erodes especially the value of medium to longer-dated bonds.
The Labor Department said its Consumer Price Index, the government's broadest inflation gauge, dipped 0.1 percent after being unchanged in November. Despite the drop last month, the CPI increased 0.7 percent in the 12 months through December, the biggest increase in a year.
Benchmark 10-year Treasuries notes were last up 13/32 in price for a yield of 1.989 percent, down 4.5 basis points from late on Tuesday.
The 30-year bond was up 1 point in price, yielding 2.755 percent, down 5.1 basis points from Tuesday.
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