U.S. Treasury yields dipped on Wednesday as investors digested September inflation data and insights into the Federal Reserve’s tapering plans.
The yield on the benchmark 10-year Treasury note moved 3.5 basis points lower to 1.545% by 2:20 p.m. ET. The yield on the 30-year Treasury bond fell by 6.8 basis points to 2.037%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
Minutes from the Federal Open Market Committee’s September meeting showed the central bank could begin a “gradual tapering process” by as soon as mid-November.
Consumer prices increased slightly more than expected in September with the consumer price index for all items rising 0.4% for the month, compared to the 0.3% Dow Jones estimate, the Labor Department reported Wednesday. On a year-over-year basis, prices increased 5.4% vs. the estimate for 5.3%.
However, excluding volatile food and energy prices, the CPI increased 0.2% on the month and 4% year over year, against respective estimates for 0.3% and 4%.
“The print reflected that while transitory factors continue to roll-off, stickier more persistent factors are becoming more prevalent, which the Fed is more likely to respond to,” Bank of America analysts said in a note.
The minutes from the Fed’s September meeting are then set to be released at 2 p.m. ET, with investors searching for more clues about the central bank’s timeline on paring back its asset purchasing program.
Fed Governor Lael Brainard is scheduled to make a speech at 4:30 p.m. ET, about engaging tribal leaders on financial inclusion and the economic challenges of the pandemic at a roundtable with Oklahoma’s Tribal Leaders.
Fed Governor Michelle Bowman is also set to speak at 8 p.m. ET about making monetary policy and the economic outlook at the Dykhouse Scholar Program Speakers Series in Money, Banking, and Regulation, at South Dakota State University.
— CNBC’s Yun Li and Maggie Fitzgerald contributed to this market report.
