The yield on the benchmark US 10-year Treasury note rose above 1.59% on Wednesday, after US CPI data came in slightly above market expectations and as traders still wait for the FOMC minutes due later in the day for more clarity on the Fed’s next policy steps. Investors have been worrying that a spike in commodity prices would weight on growth and push inflation even higher although a rally in oil paused.
At the same time the dollar index cut some early losses to trade around 94.5 on Wednesday, back to levels not seen since September of 2020, after fresh CPI figures showed inflationary pressures remained high in September, raising the odds the Fed will have to tight faster than expected. FOMC meeting minutes due later in the day should provide more clarity on what the central bank next steps will be.