U.S. Treasury yields were slightly higher on Friday as investors considered the path ahead for interest rates after fresh comments from Federal Reserve speakers.
At 3:58 a.m. ET, the yield on the 10-year Treasury was up by just over two basis points to 4.3486%. The 2-year Treasury yield was last more than two basis points higher to 4.7413%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
Investors considered the uncertain outlook for interest rates, especially when and how often they would be cut this year.
Fed Governor Christopher Waller on Thursday said that he was looking for more evidence that inflation was cooling before cutting interest rates.
“I am going to need to see at least another couple more months of inflation data before I can judge whether January was a speed bump or a pothole,” he said.
January’s consumer price index and producer price index readings had both come in hotter than expected, raising concerns about whether inflation is more persistent than many had hoped for.
Waller’s comments were also echoed by Fed Governor Lisa Cook, who said that while she expects rates to be cut this year, she also wanted more confidence in inflation easing.
Their comments were in line with the general sentiment presented by the Fed in recent weeks, including by the minutes from the central bank’s January policy meeting which were released earlier this week.
They showed that policymakers were keen to not rush any decisions around rate cuts and make them cautiously, depending on data, but also highlighted that central bankers were not expecting any further interest rate hikes.
