U.S. Treasury yields were mixed Friday as investors digested Thursday’s gross domestic product report and looked ahead to the release of key inflation figures.
At 6:50 a.m. ET, the 10-year Treasury was down by 1.6 points to 4.69%. The yield on the 2-year Treasury rose less than one basis point to 5.0002%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
The yields on the 10-year Treasury and 2-year Treasury had soared to their highest levels since November on Thursday, following the release of a weaker-than-expected U.S. gross domestic product reading.
GDP grew by 1.6% in the first quarter, far lower than the 2.4% economists surveyed by Dow Jones had expected. The report also reflected that consumer prices rose far more than in the previous quarter, sparking renewed concerns about sticky inflation and the outlook for Federal Reserve monetary policy.
Fresh inflation insights are expected Friday in form of the personal consumption expenditures price index, the Fed’s favored inflation gauge.
Economists surveyed by Dow Jones are expecting headline PCE to reflect increases of 0.3% from the previous month and a 2.6% from a year ago. So called core-PCE, which strips out food and energy costs, is expected to have risen 0.3% on a monthly basis and 2.7% on an annual basis.
This comes ahead of the Fed’s policy meeting next week, at which the central bank is expected to keep rates unchanged, but uncertainty remains around what guidance policymakers may give on interest rates.
Questions around whether there could be fewer rate cuts than anticipated this year, or even none at all until 2025, have emerged in recent weeks as market expectations for when the first rate cut will take place were pushed backward.
