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(Bloomberg) -- US government bonds fell on Wednesday, failing to hold gains sparked by inflation data that were viewed as allowing the Federal Reserve to cut interest rates next week but leaving the longer-term outlook murky.

The selloff boosted Treasury yields by at least a basis point and as much as five basis points as oil prices rose. Earlier in US trading, short-maturity yields led a move lower after the November consumer price index matched economist estimates.

The inflation data cemented traders’ view the Fed will cut its policy rate for a third time this year on Dec. 18, by a quarter point. Swap contracts linked to the decision priced in almost 23 basis points worth of easing versus 20 basis points before the report. That pricing was maintained even as Treasury yields erased their declines.

“While today’s print was the last hurdle to clear for the Fed to cut next week,” the “recent upticks in inflation will make it hard for the Fed to guarantee a straightforward continuation of rate cuts in 2025,” said Lara Castleton, head of US portfolio construction and strategy at Janus Henderson Investors, which manages about $382 billion in assets. “Reignition of inflation is one of the top concerns for clients next year.”

The so-called core consumer price index — which excludes food and energy costs — increased 0.3% for a fourth straight month, Bureau of Labor Statistics figures showed. From a year ago, it rose 3.3%.

“The FOMC will go ahead now and cut by 25 basis points next week,” Jay Bryson, Wells Fargo & Co. chief economist said on Bloomberg Television. “There’s nothing here to say the Fed won’t cut next week.”

Still, some on Wall Street saw Wednesday’s figures as evidence the disinflation trend has stalled and that the Fed may look to hold rates steady after next week’s move. Economist forecasts range from quarter-point cuts at every meeting through mid-year to no moves in 2025.

Swaps traders see a cumulative 82 basis points worth of cuts by the end of 2025, implying that a quarter-point cut next week would be followed by roughly two more in 2025. That’s less than the four cuts Fed officials laid out in the latest update to their quarterly dot plot in September.

In the wake of the data and as expectations firmed up for a December rate cut, a flurry of buyers were seen in January and February fed funds futures — a move that implies some rising wagers on another Fed reduction to start 2025. Buying in both contracts has been a popular play since Friday’s mixed November employment report, helped by Morgan Stanley’s buy recommendation to target quarter-point easing at both the December and January policy meetings.