WASHINGTON (dpa-AFX) - After moving notably higher over the two previous sessions, treasuries gave back some ground during trading on Wednesday.
Bond prices moved lower early in the session and remained in the red for the rest of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.5 basis points to 4.664 percent.
The pullback by treasuries came following the release of a Commerce Department report showing consumer prices in the U.S. increased by slightly more than expected in the month of July.
The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.2 percent in July after edging down by 0.1 percent in June. Economists had expected prices to inch up by 0.1 percent.
The report also said the annual rate of growth by the PCE price index came in at 3.7 percent in July, unchanged from in June. The annual rate of growth was expected to dip to 3.6 percent.
Excluding food and energy prices, the core PCE price index still rose by 0.2 percent in July after inching up by 0.1 percent in June. The increase matched economist estimates.
The annual rate of growth by the core PCE price index was 3.3 percent in July, unchanged from June and in line with expectations.
'Although many of the PCE numbers were worse than expected, the most important one - YoY Core PCE - held constant and that will give the Fed more time to leave rates on hold,' said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
He added, 'The number of dissenters at the next meeting may grow because the month-over-month readings (headline and core) are getting worse, but we believe enough of the FOMC will want to wait to see more data before making a decision to raise rates next month.'
CME Group's FedWatch Tool is currently indicating a 63.9 percent chance the Fed will leave rates unchanged next month and a 36.1 percent chance of a quarter point rate hike.
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