investors are waiting for fresh economic data

U.S. Treasury yields rose on Tuesday after economic data suggested that services inflation was struggling to moderate.

The 10-year Treasury the yield rose more than seven basis points to 4.693% and earlier hit an intraday high of 4.699%, the highest level since April 26. 2 years of Treasury yield rose more than two basis points to 4.299%.

Income and prices move in opposite directions. One basis point is equal to 0.01%.

The moves came after the ISM services price index rose to 64.4 in December from 58.2 in November. Meanwhile, the Job Openings and Labor Turnover Survey (JOLTS) showed more jobs than expected.

The combination of rising prices and high job levels could cause traders to scale back expectations of Federal Reserve rate cuts in 2025.

The ADP personal payrolls report is due later Wednesday, and the Bureau of Labor Statistics’ December jobs report is expected to show 130,000 jobs were added in December ahead of Friday’s estimate. This includes nonfarm payrolls data as well as the U.S. unemployment rate

Investors will pay close attention to the data, as it could influence their views on the potential outlook for monetary policy, particularly interest rates. This comes after the central bank in December suggested fewer interest rate cuts ahead of its next meeting on January 28-29.

The Fed is expected to leave rates unchanged at that time, with traders closing rates at about a 93% chance that rates will be kept on hold. CME Group’s FedWatch instrument.

Minutes from the Fed’s December meeting will be released on Wednesday, and investors will be poring over them for further information on policymakers’ thinking and expectations for the economy.