WASHINGTON (dpa-AFX) - Following the lackluster performance seen in the previous session, treasuries showed a substantial move to the downside during trading on Tuesday.
Bond prices moved sharply lower in morning trading and remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged 11.9 basis points to 4.983 percent.
The ten-year yield moved higher for the third consecutive session after slumping to a nearly two-month low last Thursday, briefly jumping back above 5 percent in intraday trading.
The sell-off by treasuries came following the release of a closely watched Labor Department report showing consumer prices increased by more than expected in the month of October.
The Labor Department said its consumer price index rose by 0.4 percent in October after climbing by 0.6 percent in September. Economists had expected consumer prices to rise by 0.3 percent.
The report said core consumer prices, which exclude food and energy prices, climbed by 0.3 percent in October, matching the increases seen in the two previous months. Core prices were expected to edge up by 0.2 percent.
The Labor Department noted it is not able to provide data on the annual rate of consumer price growth due to the government shutdown in October 2025.
The hotter-than-expected inflation data led to renewed concerns about the outlook for interest rates ahead of the Federal Reserve's monetary policy meeting next month.
CME Group's FedWatch Tool is currently indicating a 90.5 percent chance the Fed will raise rates by a quarter point at its December meeting.
Before the release of the data this morning, Fed Governor Christopher Waller said he is 'leaning toward' a rate hike in December and would support 'more robust action' if inflation exceeds estimates.
'In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting,' Waller said at a conference in London. 'Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take.'
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