The U.S. treasury yields demonstrated a modest change after November’s inflation reading was in line with market expectations. The CPI reading, which was not as high as feared, left yields mixed last Friday.

The consumer price index soared 0.8% last month, minutely above the 0.7% forecast, as revealed by the Labor Department on Friday. The year over year surge of November’s CPI stood at 6.8% – the fastest rate since 1982.

As a result, the 10-year treasury yield displayed a knee-jerk reaction, edging higher after the data release and eventually retreating. While the yield on the 10-year treasury note remained at 1.485%, the yield on the 30-year treasury bond rose by 1 basis point to 1.877%, indicating a 0.01% change in the bond price.

The inflation report is suggestive of the burden on households dealing with escalating prices of gas, food and rent. This data could also hamper President Biden’s goal of passing a trillion-dollar social spending package by the year end.

Treasury yields are highly sensitive to inflation expectations, as a rapidly paced inflation reduces the purchasing power of interest payments and can lead the Fed to lift short-term interest rates.

In addition, Thursday’s Labor Department report on initial jobless claims showed the number was below the forecast of 211000 and stood at 184000, the lowest reading since 1969.

These sets of data set a crucial precedent that come before the Fed’s monetary policy meet this week. It is expected that the Fed will announce speeding up the tapering of its asset purchasing program.

Economists expect the year-on-year CPI could peak to 7% before retreating and the core CPI rate could inch above 6%.