Treasury yields slipped on Friday as investors awaited the release of November’s producer price index, which will provide fresh insights into whether inflation is easing.
The benchmark 10-year Treasury yield was down by just over one basis point to 3.4815% at 4:17 a.m. ET. The yield on the 2-year Treasury was at 4.2838% after dipping by close to three basis points.
Yields and prices have an inverted relationship and one basis point equals 0.01%.
Concerns about a looming recession and the Federal Reserve’s interest rate plans have been mounting in recent weeks. Several economic data releases had suggested that rates may have to be hiked further and stay elevated for longer to lower persistently high inflation.
On Friday, fresh PPI data, which reflects wholesale inflation, will show whether the rate hikes implemented so far this year have been effective in pushing back against rising prices. The data could also provide hints about future rate policy to investors.
Many have been hoping for the Fed to pause, or significantly slow, the pace of rate hikes as they believe the U.S. economy will otherwise be dragged into a recession.
The central bank has increased rates by 75 basis points at each of its last four meetings. It is next due to meet on Dec. 13-14. Investors are widely expecting the Fed to implement a 50 basis point rate hike then and are hoping officials will provide new insights into the outlook for the U.S. economy and monetary policy.
Preliminary Michigan consumer sentiment figures for December are another key data point investors will be watching closely on Friday.
