US 10-year Treasury yield falls inches as investors await key inflation report

US 10-year Treasury yield falls inches as investors await key inflation report

Longer-dated US Treasury yields were little changed on Wednesday as investors awaited much-anticipated inflation numbers that could influence the pace of Federal Reserve rate hikes.

The benchmark 10-year Treasury yield rose less than 1 basis point to 2.801%, while the 30-year Treasury yield was marginally higher at 3.008%. Yields move inversely with prices and one basis point equals 0.01%.

The 2-year Treasury yield fell 1 basis point to 3.276% but remained well above the longer-term 10-year yield. This relationship is widely watched on Wall Street as a potential recession indicator.

This comes as market participants closely monitor the release of the July CPI report, which was released on Wednesday.

The Critical Inflation Report is believed to show that inflation has eased after consecutive hikes of 75 basis points by the Fed in June and July.

Economists expect the consumer price index to rise 0.2% in July, up from 1.3% in June, according to Dow Jones estimates. On a yearly basis, the pace of consumer inflation is expected to slow to 8.7% in July, down slightly from the 9.1% increase in June.

CPI is scheduled to be released at 8:30am ET. June wholesale inventories and July monthly federal budget are expected to be released at 10 a.m. and 2 p.m. respectively.

Elsewhere, Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari are scheduled to make comments on the U.S. economy at separate events on Wednesday.

The US Treasury will auction $35 billion in 10-year notes and $30 billion in 119-day notes.

— CNBC’s Patti Domm contributed to this report.