U.S. Treasury yields inched higher on Friday as investors awaited the latest inflation reading as well as other economic data.
At 3:25 a.m. ET, the 10-year Treasury yield was more than two basis points higher at 4.5387%, and the 2-year Treasury yield was more than two basis points higher at 4.2198%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
Treasurys
Investors are anticipating the release of the personal consumption expenditures price index — the U.S. Federal Reserve’s preferred inflation gauge — on December data and will be due out at 8:30 a.m. ET.
They’ll also monitor other economic data, including personal spending and employment cost, which are also expected to be published in the morning.
On Thursday, yields moved lower as the gross domestic product report came in weaker than expected, showing slow economic growth in the U.S. The fourth-quarter GDP growth rate was 2.3%, but economists surveyed by Dow Jones were forecasting an increase of 2.5%.
The Fed held interest rates steady on Wednesday at its first meeting of the year, at the current target range of 4.25%-4.50%, pointing to inflation risks, despite pressure to cut rates from President Donald Trump. This left traders wondering whether the Fed will enact the two rate cuts it had previously penciled in.
Fed Chair Jerome Powell said at his press conference that the central bank will need to see “real progress on inflation or some weakness in the labor market before we consider making adjustments.”
Meanwhile, Trump is planning to go ahead with tariff threats, confirming on Thursday that he will impose 25% tariffs on Canada and Mexico from Feb. 1.
“I’ll be putting the tariff of 25% on Canada and separately 25% on Mexico, and we’ll really have to do that because we have very big deficits with those countries,” Trump said.