U.S. Treasury yields dipped slightly early on Wednesday, ahead of the release of inflation data, due out later in the morning.
The yield on the benchmark 10-year Treasury note fell by less than a basis point to 1.7428% at 4 a.m. ET. The yield on the 30-year Treasury bond moved less than a basis point lower to 2.0643%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
The December consumer price index, a key inflation measure, is due to be released at 8:30 a.m. ET on Wednesday and is expected to show the hottest increase in prices since the early 1980s.
Economists expect the consumer price rose 0.4% in December, and 7% on a year-over-year basis, according to Dow Jones.
The December producer price index, another measure of inflation, is then set to come out on Thursday morning.
Federal Reserve Chairman Jerome Powell said in his confirmation hearing before the U.S. Senate on Tuesday that interest rate hikes, along with other reductions in the central bank’s support for the economy, would be needed to control inflation.
He said that the U.S. economy was healthy enough and in need of tighter monetary policy.
Speaking on CNBC’s “Squawk Box Europe” on Wednesday, DWS global head of research Francesco Curto questioned whether it would be possible to return back to the previously low levels of inflation, particularly given certain that targets to reduce carbon emissions required higher energy prices.
While Curto said “inflation can always be controlled,” he added that it was important to see coordination between economic and financial policies: “And to be frank, it seems that that is not the case.”
Auctions are scheduled to be held on Wednesday for $40 billion of 119-day bills and $36 billion of 10-year notes.
— CNBC’s Patti Domm and Jeff Cox contributed to this market report.
