After moving notably lower over the three previous sessions, treasuries showed a strong move back to the upside during trading on Tuesday.<\/p>\n
Bond prices gave back some ground after an early rally but remained firmly positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 11 basis points to 3.501 percent.<\/p>\n
The initial surge by treasuries came following the release of a report from the Labor Department showing consumer prices in the U.S. inched up by less than expected in the month of November.<\/p>\n
The Labor Department said its consumer price index crept up by 0.1 percent in November after climbing by 0.4 percent in October. Economists had expected consumer prices to rise by 0.3 percent.<\/p>\n
Excluding food and energy prices, core consumer prices edged up by 0.2 percent in November after rising by 0.3 percent in October. Core prices were expected to show another 0.3 percent increase.<\/p>\n
The report also showed the annual rate of growth by consumer prices slowed to 7.1 percent in November from 7.7 percent in October.<\/p>\n
The year-over-year increase in November, which came in below economist estimates for a slowdown to 7.3 percent, reflects the slowest annual growth since December 2021.<\/p>\n
The annual rate of growth by core consumer prices also slowed to 6.0 percent in November from 6.3 percent in October, while economists had expected price growth to slow to 6.1 percent.<\/p>\n
The tamer-than-expected inflation data eased concerns about the outlook for interest rates ahead of the Federal Reserve’s monetary policy announcement on Wednesday.<\/p>\n
The Fed is still likely to raise interest rate by another 50 basis points, but the slower price growth may offset recent worries about future rate hikes.<\/p>\n
Looking ahead, the Fed’s monetary policy decision is likely to be in the spotlight on Wednesday, overshadowing a report on import and export prices. <\/p>\n