Treasury yields ended little changed to slightly lower on Friday as investors assessed September PCE inflation data that offered a bit of both good and bad news. Two-, 10- and 30-year yields finished with weekly declines for the second time in the past three weeks.
What happened
The yield on the 2-year Treasury
BX:TMUBMUSD02Y
declined 2.9 basis points to a two-week low of 5.010% from 5.039% on Thursday. The rate fell 7.2 basis points this week, the largest weekly decline in about a month.
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
was marginally higher at 4.846% versus 4.843% Thursday afternoon. It declined 7.8 basis points this week.
The yield on the 30-year Treasury
BX:TMUBMUSD30Y
rose 3.7 basis points to 5.023% from 4.986% late Thursday. The 30-year rate dropped 6.4 basis points this week.
What drove markets Data released on Friday showed that inflation rose faster than expected, based on the Fed’s preferred gauge. The so-called PCE price index rose 0.4% for the second month in a row in September, spurred in part by higher oil prices. The index has risen 3.4% over the past year, unchanged from the prior month.Core inflation — which excludes food and energy, and matters most to policy makers— fell to 3.7% from 3.8% previously on a year-on-year basis, providing investors and traders with at least a kernel of hope that such readings might continue to ease further. Yields had tumbled on Thursday, despite a surprisingly strong 4.9% annual pace of growth for the U.S. economy in the third quarter. While the Fed is mostly expected to take no action next Wednesday, investors will be focused on hints of any possibility of a rate hike in December or January. Read: Pressure still on Fed as cost of goods and services rises more than expected and Stocks to struggle for t …
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