10-year Treasury yield is little changed after August core inflation is a little hotter than expected

U.S. Treasury yields were flat on Wednesday as investors weighed the latest consumer inflation figures, which could affect Federal Reserve interest rate policy.  

The yield on the 10-year Treasury was lower by less than 1 basis point to 4.256%. The 2-year Treasury yield was last at 4.98% after falling more than 2 basis points.

Yields and prices move in opposite directions and one basis point equals 0.01%.

Investors pored over the August consumer price index report. Core prices, which exclude volatile food and energy components, rose 0.3% in August, higher than the forecast 0.2% from economists polled by Dow Jones. Core prices on an annual basis, however, met expectations with a 4.3% increase.

Headline inflation including food and energy increased 0.6% in August and 3.7% from a year ago, against estimates of 0.6% and 3.6%, respectively.

The data is likely to inform the Federal Reserve's upcoming interest rate decisions. Markets are widely expecting the central bank to leave rates unchanged when it meets next week, but officials have suggested further rate hikes may be on the horizon, depending on economic data.

Many investors are concerned about how the economy would be affected if rates went higher still. They will therefore be looking to this week's inflation data for clues about what the Fed may do in the remainder of the year and what that could mean for the U.S. economy.

The CPI report will be followed by the producer price index, which tracks wholesale inflation, for August, and retail sales data on Thursday and the latest consumer sentiment report on Friday.

— CNBC's Brian Evans and Jeff Cox contributed to this report.