Traders work on the floor of the New York Stock Exchange during the morning trading on November 07, 2024 in New York City.
Treasury yields slid Wednesday as a key inflation reading met expectations.
The yield on the 10-year Treasury fell almost 5 basis points to 4.256%. The 2-year Treasury yield dipped 3.3 basis points to 4.221%.
One basis point equals 0.01%, and yields and prices move in opposite directions.
The October personal consumption expenditures price index, a broad measure that the Fed favors as its primary inflation gauge, increased 0.2% on the month and 2.3% over the past year. Both were in line with the Dow Jones consensus forecast, although the annual rate was higher than the 2.1% level in September. Excluding food and energy, core inflation increased 0.3% on a monthly basis and 2.8% in one year, also in-line with economists' expectations.
Get top local stories in Philly delivered to you every morning. Sign up for NBC Philadelphia's News Headlines newsletter.
"Overall, there was nothing in the data set that would alter the Fed's thinking regarding a cut/pause next month," Ian Lyngen, BMO's head of U.S. rates, said in a note.
Also reported Wednesday, initial claims for unemployment benefits last week fell by 2,000 to 213,000 for the week ended Nov. 23, a sign that the U.S. labor market remains tight. Economists polled by Dow Jones expected claims to come in at 215,000.
A summary of the Fed's meeting minutes from November published Tuesday showed Fed officials confident that inflation is easing and that further interest rate cuts will happen, albeit at a gradual pace.
Money Report
"In discussing the outlook for monetary policy, participants anticipated that if the data came in about as expected, with inflation continuing to move down sustainably to 2 percent and the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time," the minutes said.
Traders are now pricing in a 70% chance that the Fed will cut rates by another quarter point at its next policy meeting in December, with 30% expecting no change, based on prices for interest rates as tracked by the CME Group's FedWatch Tool. The Fed slashed rates a half a percentage point in September and another quarter point earlier this month, lowering its benchmark rate to the current range of 4.50% to 4.75%.
Meanwhile, President-elect Donald Trump's pick of Scott Bessent as Treasury secretary has continued to calm investors this week. As a fiscal conservative, Bessent is expected to prioritize market stability and economic growth.
