FX.co ★ Treasuries Finish Volatile Session Roughly Flat

Treasuries displayed significant fluctuations during Wednesday's trading session, ultimately closing the day virtually unchanged.

Bond prices initially rebounded from an early decline but trended downward again as the day advanced. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, edged up by less than a basis point to 3.653 percent.

This increase marks the first rise in the ten-year yield in seven sessions, lifting it from its lowest closing level in over a year.

The day's volatility was fueled by the release of the Labor Department's closely monitored report on consumer price inflation for August.

Although the report indicated that consumer prices increased in line with economists' expectations, core consumer prices experienced a slightly higher-than-expected rise.

The Labor Department reported that its consumer price index rose by 0.2 percent in August, consistent with July's increase and matching economists' forecasts.

However, core consumer prices, which exclude food and energy costs, increased by 0.3 percent in August, following a 0.2 percent rise in July. Economists had anticipated core prices to climb by another 0.2 percent.

Despite these data, the Federal Reserve is still expected to lower interest rates next week. However, the larger-than-expected increase in core consumer prices lessens the likelihood of the central bank implementing a 50-basis-point rate cut.

Following the report's release, CME Group's FedWatch Tool indicated an 87.0 percent probability of a quarter-point rate cut and just a 13.0 percent chance of a half-point rate cut.

The report also noted that the annual rate of consumer price growth decelerated to 2.5 percent in August from 2.9 percent in July, whereas economists had projected a slowdown to 2.6 percent.

The annual rate of core consumer price growth remained steady at 3.2 percent in August, aligning with economists' estimates.

Looking ahead, market activity on Thursday might be influenced by reactions to separate Labor Department reports on producer price inflation and weekly jobless claims.