U.S. Treasury yields dipped on Friday as investors reacted to President Donald Trump’s latest comments and anticipated further economic data.
At 5:39 a.m. ET, the 10-year Treasury yield fell by 1 basis point to 4.632%. The 2-year Treasury yield slipped by nearly 2 basis points to 4.268%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
Treasurys
Investors watched as Trump addressed global leaders at the World Economic Forum in Davos, Switzerland, via video on Thursday. The newly inaugurated president took a swipe at the Federal Reserve regarding interest rates.
“I’ll demand that interest rates drop immediately,” Trump said. “And likewise, they should be dropping all over the world. Interest rates should follow us all over.”
Those comments come ahead of the Federal Open Market Committee meeting on Jan. 28-29, where interest rate decisions will be made. Markets are pricing in an almost 0% chance that the Fed will lower interest rates at its next meeting, per the CME Group data.
Investors are also awaiting further economic data on Friday, including the release of the S&P Global Composite PMI Flash, which will offer insight into the growth of the manufacturing and services sectors. Existing home sales data is also due to be published.
BlackRock CEO Larry Fink told CNBC’s “Squawk Box” on Thursday that Trump’s plans to inject large amounts of capital into the private sector may create “new inflationary pressures.”
“There are some very large inflationary pressures that we all have to be aware of,” Fink said. “And depending on how this plays out, there is a scenario where we’re going to have much more elevated interest rates because of inflation. And that’s going to have a very negative impact on the equity market.”
Fink said it’s possible that the 10-year Treasury yield will reach 5.5% if inflation reaccelerates.