By Yields on treasury bonds experienced a slight increase on Friday as investors eagerly awaited the release of important inflation data. Let’s take a closer look at what’s been happening in the market.
Yield Movements
- The yield on the 2-year Treasury BX:TMUBMUSD02Y dropped by 0.8 basis points, settling at 5.04%. It’s worth noting that bond yields and prices tend to move in opposite directions.
- On the other hand, the yield on the 10-year Treasury BX:TMUBMUSD10Y rose by 2.1 basis points, reaching 4.87%.
- The yield on the 30-year Treasury BX:TMUBMUSD30Y also saw an uptick of 2.4 basis points, ending at 5.02%.
Market Factors at Play
Despite the strong 4.9% annualized growth rate of the U.S. economy in the third quarter, bond yields experienced a decline on Thursday. Interestingly, this drop coincided with a successful auction of 7-year notes by the U.S. Treasury.
Moving forward, investors are keenly focused on the PCE price index, which is the preferred inflation metric of the Federal Reserve. Specifically, they anticipate a monthly uptick of 0.3% at the core level. Although no interest rate changes are expected next week, market participants will closely scrutinize the central bank’s commentary regarding the possibility of further rate hikes in December.
Economists at Vanguard Group highlighted that as the Fed completes its current hiking cycle, they will carefully monitor data trends. In terms of inflation, the central bank desires a slight slowdown in monthly figures to continue their progress in this area.
Let’s keep an eye on bond yields as we await further economic developments.
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