Treasury yields edged higher on Friday as investors pondered what’s next for the US economy and awaited comments from Federal Reserve officials that could provide clues to monetary policy plans.
As of 4 p.m. ET, the return on the 10 years treasury rose just over 3 basis points to 3.4822%, erasing some of Thursday’s declines. That 2 years treasury The yield was last almost unchanged at 4.2476%.
Yields and prices are inversely related. One basis point equals 0.01%.
Investors pondered the outlook for the US economy after Thursday’s November retail sales figure came in weaker than expected. Fears of a looming recession linked to the Fed’s aggressive rate hikes in 2022 have been mounting in recent weeks.
On Wednesday, the central bank announced a 50 basis point hike in interest rates, down slightly from the 75 basis point hikes implemented at the previous four Fed meetings.
The central bank also hinted that interest rates would remain high for longer, and Chair Jerome Powell reiterated that the fight against inflation must continue.
A number of Fed officials are due to comment on Friday and into the week ahead. Investors will scour these for insights into the central bank’s expectations for the economy and its policy plans.
On the data front, flash December purchasing managers’ index (PMI) figures for services and manufacturing will be released on Friday. The data reflects whether economic activity is growing or shrinking and at what pace.
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