U.S. Treasury yields fell on Thursday as investors awaited the latest inflation report that could inform monetary policy decisions.
At 3:38 a.m. ET, the yield on the 10-year Treasury, which was hovering around the 4% mark for much of the week, was down by over four basis points to 3.9885%.
The 2-year Treasury yield was last more than three basis points lower to 4.3393%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Investors awaited the highly anticipated December consumer price index report, which is out Thursday. Economists surveyed by Dow Jones are expecting the CPI to reflect a 0.2% increase on a monthly basis and 3.2% from a year earlier.
That would be slightly ahead of November’s figures, which reflected increases of 0.1% and 3.1%, respectively.
The data could shed some light on the outlook for monetary policy, especially interest rates. The Federal Reserve in December said it was expecting to cut rates in small increments three times this year.
However, minutes from the meeting that were published earlier in January showed that significant uncertainty remains about the direction of interest rates and that some policymakers have also not excluded the possibility of rates going higher still.
Meanwhile, many investors have been hoping that rates will be cut more than the Fed itself is anticipating and that cuts will begin as soon as March. Traders were last pricing in an around 69% chance of the first rate cut taking place then.
The CPI print will be followed on Friday by December’s producer price index, which tracks inflation on a wholesale level.
Also on Thursday, weekly initial jobless claims are due.
