The core personal consumption expenditures price index, the Federal Reserve’s preferred core inflation metric, increased 0.1% for the month of November, and was up 3.2% from a year ago, the Commerce Department reported Friday.
Economists surveyed by Dow Jones had been expecting respective increases of 0.1% and 3.3% respectively.
“It was a softer inflation print to be sure, although we’ll argue the market was biased for a downside surprise which has translated to a somewhat counterintuitive price response,” BMO’s rate strategist Ben Jeffery said in a note.
10-year U.S. Treasury yields have declined by almost a percentage point since the end of October on rising expectations that the Fed will begin cutting rates as soon as March.
