Treasury yields climb ahead of inflation data

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The 10-year U.S. Treasury yield held above 1.6% early on Friday, as investors awaited the release of inflation data later in the morning.

The yield on the benchmark 10-year Treasury note fell to 1.606% at around 7:10 a.m. ET. The yield on the 30-year Treasury bond fell to 2.284%. Yields move inversely to prices.

April’s personal consumption expenditures price index, a key measure of inflation, is set to come out at 8:30 a.m. ET. The PCE is expected to have increased 2.9% in April year-over-year, according to economists polled by Dow Jones.

The market has also been keeping tabs on inflation data, as the Fed has said it will let it run hotter, arguing that any rising price pressures are “transitory.”

However, Birch added that a key risk was if inflation headed off on a “different trajectory and it’s going to be the main thing that we see the Fed trying to grapple with over the course of the next 12 months.”

The 10-year rate rose to top 1.6% in the previous session, as the number of weekly jobless claims filed last week came in lower than expected. The U.S. Department of Labor said there were 406,000 initial jobless claims last week, below the 425,000 forecasted by economists polled by Dow Jones.

Unemployment data has been closely monitored by investors, given that Federal Reserve is seeking a fuller recovery in the labor market before considering tightening monetary policy.


Cathie Wood sees deflation returning, boosting innovation stocks and bitcoin

Negotiations in Washington over an infrastructure spending package are also in focus for investors. Senate Republicans presented a $928 billion counteroffer to President Joe Biden on Thursday, well below the White House’s latest $1.7 trillion proposal.

Biden is set to share his first full presidential budget on Friday, which is due to come out at 2 p.m. ET.

There are no auctions scheduled to be held Friday.

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