Treasury yields fell on Friday as investors digested the previous day's economic data and looked forward to another reading on inflation.
The yield on the benchmark 10-year Treasury note fell 2 basis points to 4.1085% at 3:37 a.m. EST, while the yield on the 2-year Treasury note fell 1 basis point to 4.3036%. Yields move inversely with prices and the basis point equals 0.01%.
This comes after US GDP data came in well above expectations in the fourth quarter, with the economy growing at an annual rate of 3.3% – above economists' expectations of 2%.
At the same time, inflation continued to slow. The core personal consumption expenditures price index — which the Fed monitors for long-term inflation trends — rose 2.7% year over year, down from 5.9% a year ago.
Lockers
| tape | a company | fruit | It changes |
|---|---|---|---|
| US1M | United States Treasury for one month | 5.39% | +0.025 |
| US3M | US Treasury for 3 months | 5.414% | +0.052 |
| US6M | US Treasury for 6 months | 5.234% | +0.02 |
| US1Y | US 1 Year Treasury | 4.809% | +0.048 |
| US2Y | United States Treasury for two years | 4.31% | -0.004 |
| US10Y | United States Treasury for 10 years | 4.109% | -0.023 |
| US30Y | United States Treasury for 30 years | 4.356% | -0.025 |
Investors are closely watching economic data for hints about when the Federal Reserve might start cutting interest rates.
Paul Ashworth, chief North America economist at Capital Economics, said: “Although GDP growth came in hotter than expected in the fourth quarter, core inflation continued to slow, with annual core PCE inflation reaching the 2 target. % in the fourth quarter. “The upshot is that an early Fed rate cut in the spring remains the most likely outcome.”
Data scheduled for release on Friday include the Personal Consumption Expenditures price index for December, the Federal Reserve's preferred measure of inflation. Core PCE prices are expected to rise 3% in December year over year, according to economists polled by Dow Jones.