The benchmark 10-year Treasury yield rose slightly on Friday as investors look ahead to the Federal Reserve’s final meeting of the year.
The 10-year Treasury yield was up more than 7 basis points at 4.395% after jumping more than 6 basis points on Thursday to climb above the 4.3% level. The benchmark yield hit a new high of 4.353% on Friday, its highest level since Nov. 25. Meanwhile, the yield on the 2-year Treasury was also 5 basis points higher at 4.236%.
Yields and prices move in opposite directions, and one basis point equals 0.01%.
The moves come ahead of the Fed’s Dec. 17-18 meeting, with investors overwhelmingly expecting a quarter-point interest rate cut.
U.S. inflation data published Thursday showed wholesale prices rose 0.4% in November, higher than the 0.2% level expected by economists polled by Dow Jones. At the same time, a jump in jobless claims data signaled a potentially weaker economy, muting some of the gain in yields.
The pair of reports came one day after November’s consumer price index report published Wednesday showed a 12-month inflation rate of 2.7% and a 0.3% monthly increase. Core inflation, which excludes food and energy prices, was at 3.3% on an annual basis and 0.3% monthly. All the numbers were in line with the Dow Jones consensus estimates.
Traders are currently pricing in a nearly 97% chance of a quarter-point rate reduction at the Fed’s meeting next week, according to the CME FedWatch Tool.