US Treasury yields recover after inflation-driven selloff

US Treasury yields fell on Wednesday after an initial spike, fully recovering early losses triggered by higher-than-expected inflation data, with most maturities ending the session lower. The Labor Department reported the Consumer Price Index rose 0.6% in September, pushing the annual rate to 3.7%, above the 3.6% forecast and August's 3.4%. Two-year yields hit a two-week high before retreating alongside longer-term bonds. The reversal highlighted a debate between rising consumer prices and recent Federal Reserve comments suggesting no rush to hike rates further. Market odds for an October rate increase rose to 40% before settling near 33% by evening, per LSEG data.