NEW YORK: US Treasuries yields were little changed on Wednesday as investors waited to see if the US Federal Reserve's upcoming policy statement would maintain its "considerable time" pledge on keeping interest rates near zero.
The US central bank's policy-setting group, the Federal Open Market Committee, is scheduled to release a statement at 2 p.m. EST (1900 GMT) after a two-day meeting. Fed Chair Janet Yellen will hold a press conference half hour later (1930 GMT).
Stronger data on domestic jobs and manufacturing have supported the view that the central bank would consider raising ending its near-zero rate policy in mid-2015, some analysts said.
"They have set up the path for a rate hike unless something really goes awry," said Robert Tipp, chief investment strategist at Prudential Fixed Income in Newark, New Jersey.
But the weakness in Europe and Japan and slowing growth in China pose risks for US economic expansion and might cause Fed policymakers to choose to not hike rates until 2016, some analysts said.
The dramatic drop in oil prices, with US crude futures hovering at 5-1/2 year lows, has intensified disinflation pressure globally, analysts said. Oil's retreat has caused stress in stock markets and some credit sectors as well as for energy exporters, including Russia, whose currency has seen a near free-fall.
An early result of the steep decline in energy costs was the unexpectedly big drop in the US consumer price index in November. The CPI's 0.3 percent fall last month was the biggest in nearly six years, spurring buying in Treasuries and pushing yields down from their initial highs.
"Today's CPI report is a reminder on how low inflation has fallen," said Mike Lorizio, head of Treasuries trading at John Hancock Asset Management in Boston.
The weak inflation outlook has hammered Treasury Inflation-Protected Securities, whose value is referenced against the CPI.
TIPS' yield gaps versus regular Treasuries, a gauge of investors' inflation expectations, narrowed briefly after the weaker-than-expected CPI data.
The five-year TIPS inflation break-even rate was unchanged at 1.15 percent after it fell on Tuesday to 1.08 percent, which was the lowest since September 2010, Reuters data showed.
Among nominal Treasuries, benchmark 10-year note yield was 2.075 percent, up 0.4 basis point from late on Tuesday, while 30-year bond yield edged up 0.5 basis point at 2.706 percent.
January US crude futures was down 12 cents at $55.81 a barrel after it hit a 5-1/2-year low of $53.60 on Tuesday.
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