U.S. Treasury yields were little changed on Friday as investors considered the outlook for interest rates after inflation data released Thursday came in higher than expected.
The yield on the 10-year Treasury was down by less than one basis point at 4.3%. The 2-year Treasury yield was last 2.2 basis points higher at 4.71%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
Investors assessed the path ahead for monetary policy after Thursday’s inflation data came in hotter than expected, raising uncertainty about when interest rate cuts may begin.
The producer price index, which tracks inflation on a wholesale level, reflected a 0.6% increase in February from the previous month. The core PPI, which excludes food and energy prices, came in at 0.3%.
Economists had been looking for increases of 0.3% and 0.2%, respectively, according to a Dow Jones poll.
That comes after the consumer price index for February also came in just above expectations earlier this week, advancing 0.4% from the previous month and 3.2% on an annual basis.
The inflation readings marked the final key data release before the Federal Reserve’s next meeting on March 19-20. Markets are widely expecting rates to be held steady then.
Investors are, however, hoping for hints about the timeline for interest rate cuts, which Fed officials have so far given little indication about. According to CME Group’s FedWatch tool, traders were pricing in an around 60% chance of the first rate cut to take place in June, a slightly lower probability than earlier in the week.
