WASHINGTON (dpa-AFX) - Following the pullback seen over the course of the previous session, treasuries saw further downside during trading on Wednesday.
Bond prices saw considerable early volatility but settled into negative territory as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.0 basis points to 4.318 percent.
The lower close by treasuries came following the release of a closely watched Labor Department report showing consumer prices in the U.S. increased by slightly less than expected in the month of February.
The Labor Department said its consumer price index crept up by 0.2 percent in February after climbing by 0.5 percent in January. Economists had expected consumer prices to rise by 0.3 percent.
Excluding food and energy prices, the core consumer price index also rose by 0.2 percent in February following a 0.4 percent increase in January. Core prices were also expected to climb by 0.3 percent.
The report also said the annual rate of consumer price growth slowed to 2.8 percent in February from 3.0 percent in January. Economists had expected the pace of price growth to edge down to 2.9 percent.
The annual rate of core consumer price growth also slowed to 3.1 percent in February from 3.3 percent in January. Core price growth was expected to dip to 3.2 percent.
Treasuries initially jumped in reaction to the report, as the data led to optimism about the Federal Reserve resuming interest rate cuts in the near future.
Buying interest quickly evaporated, however, as the data also eased concerns about stagflation, reducing the safe haven appeal of bonds.
Reports on producer price inflation and weekly jobless claims are likely to attract attention on Thursday along with the latest developments on the tariff front.
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