U.S. Treasury yields were lower on Friday as investors awaited the release of a key inflation reading — the most anticipated data of the week.
At 3:40 a.m. ET, the benchmark 10-year yield Treasury yield fell by over four basis points to 4.2444%, and the 2-year Treasury yield was over two basis points lower at 4.0506%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
Treasurys
Investors are looking ahead to the release of the personal consumption expenditures price index — the Federal Reserve’s preferred inflation gauge — which will be published at 8:30 a.m. ET on Friday.
The measure of price changes for consumers is expected to have risen 0.3% from December and 2.5% on a yearly basis, according to economists polled by Dow Jones. Core PCE, which excludes volatile food and energy prices, is forecast to have increased 0.3% monthly and 2.6% on an annual basis.
The PCE report is an important measure of inflation and helps the Fed to make decisions on cutting interest rates. The Fed’s next meeting is on March 18-19. January data on personal spending is also due in the morning.
Investors are anxiously monitoring U.S. President Donald Trump’s various tariff threats and orders. His plans for 25% tariffs on imports from Mexico and Canada will go into effect from March 4, after a one-month pause, he said in a Truth Social post on Thursday.
Trump said that China, which is already being charged tariffs, will face an additional 10% tariff on the same data.
He also said he would impose 25% tariffs on imports from the European Union on Wednesday but is walking back these threats after U.K. Prime Minister Keir Starmer visited the White House on Thursday.
I think there is a very good chance that in the case of these two great friendly countries, I think we could end up with a real trade deal … where the tariffs wouldn’t be necessary. We’ll see,” Trump told reporters during a joint press briefing with Starmer.