U.S. Treasury yields were lower on Wednesday as investors awaited a key inflation reading, and weighed statements from the Federal Reserve meeting minutes from November.
At 4:40 a.m. ET, the yield on the 10-year Treasury was down by more than three basis points to 4.2673%. The 2-year Treasury yield was also down by more than three basis points at 4.2210%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
A flurry of economic data is expected to be published on Wednesday ahead of Thanksgiving on Thursday when markets will be closed.
Investors are especially waiting for the October personal spending and income release, which contains the personal consumption expenditures, or PCE, and is considered to be the Federal Reserve's preferred inflation gauge. The data is set to be released at 10 a.m. ET on Wednesday.
Economists are expecting a 2.8% year-over-year increase for the core reading, which excludes food and energy prices, according to a Dow Jones estimate.
A summary of the Fed's meeting minutes from November was published on Tuesday, with Fed officials expressing confidence that inflation is easing and that further interest rate cuts will happen at a gradual pace.
"In discussing the outlook for monetary policy, participants anticipated that if the data came in about as expected, with inflation continuing to move down sustainably to 2 percent and the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time," the minutes said.
Traders are pricing in a 66% chance that the Fed will cut rates by a quarter point in its next December meeting, with 33% expecting no change, according to the CME Group' FedWatch Tool..
Meanwhile, President-elect Donald Trump's pick of Scott Bessent as Treasury secretary, continues to calm investors nerves. As a fiscal conservative, Bessent is expected to prioritize market stability.