Bond yields slipped Friday ahead of a key report on inflation and comments from a top Federal Reserve official.
What’s happening
-
The yield on the 2-year Treasury
TMUBMUSD02Y,
4.146%
fell 7 basis points to 4.14%. Yields move in the opposite direction to prices. -
The yield on the 10-year Treasury
TMUBMUSD10Y,
3.689%
declined 8 points to 3.70%. -
The yield on the 30-year Treasury
TMUBMUSD30Y,
3.634%
fell 8 basis points to 3.65%.
What’s driving markets
Yields on the 2-year Treasury have jumped for 13 of the past 16 sessions, while the yield for both the 10-year and the 30-year Treasury settled Thursday at the third highest level of the year.
The yield curve bearishly flattened after surprisingly strong jobless claims data.
“To the extent that more slack in labor markets was one of the preconditions necessary Chair Powell mentioned last week that would support slowing and eventually ending the hiking cycle, and that the 4-week average of jobless claims has retraced significantly lower in the last two months, it’s not unsurprising the curve reacted as it did to this data point,” said rates strategists at JPMorgan.
Fed Vice Chair Lael Brainard headlines another wave of Fed talk on Friday.
The PCE price index that the Fed uses to target inflation is due for release, along with consumer spending and personal income numbers. Shortly after the stock-market open, Chicago PMI and the final University of Michigan consumer sentiment reading will be released.
