Big economic data releases cause treasury yields to increase.

Investors anticipate crucial economic data in the upcoming days, causing U.S. Treasury yields to increase on Wednesday.

The benchmark yield increased by more than 3 points to 4.174%, while the yield on the rose by more than 3 basis points to 4.38%.

Yields move inversely to prices.

This week, two crucial economic indicators will be released: the preliminary fourth-quarter GDP growth figure on Thursday and the Commerce Department's closely monitored personal consumption expenditures price index for December on Friday.

The Federal Reserve will use both data points to determine when and by how much to cut interest rates, which will significantly impact the markets and the economy this year.

The Bank of Canada, European Central Bank, and Fed are expected to announce policy decisions in the coming week, which may lead to an increase in rates, according to Deutsche Bank's Head of Global Economics Jim Reid.

Yesterday, the probability of a Fed rate cut by March decreased from 38% to 49% at the intraday low, but this increase was mainly due to dovish interview comments by former St Louis Fed President Bullard, according to Reid's email on Wednesday.

The December meeting has priced in 137bps of cuts for 2024, up from the near-two-month low of 133bps on Monday. This indicates a notable shift back from the intraday peak on January 12, when 170bps of cuts were priced in for 2024. Despite this, a sizeable amount of cuts is still expected this year, particularly in a non-recession scenario.

The Federal Reserve will conduct auctions for $60 billion of 17-week Treasury bills, $61 billion of 7-week Treasury bills, and $28 billion of 2-year floating-rate notes.