Treasury yields rise as investors await key inflation report

NEW YORK (Jan 27) Treasury yields climbed on Friday as investors awaited key inflation figures and assessed the outlook for the U.S. economy after Thursday’s gross domestic product report came in better than expected.

At 4:35 a.m. ET, the yield on the benchmark 10-year Treasury was up by over four basis points to 3.5367%. The 2-year Treasury yield was last trading at 4.199% after rising by around two basis points.

Yields and prices have an inverted relationship and one basis point equals 0.01%.

Investors awaited the release of the personal consumption expenditure price index report on Friday, which is one of the Federal Reserve’s favored inflation measures. It reflects how much consumers spend on goods and services.

Personal income and spending figures are also due Friday.

The data could affect the Fed’s next interest rate decision, which is expected at the conclusion of its next meeting on Feb. 1. Many investors are hoping for the central bank to slow the pace of interest rate hikes further and announce a 25 basis point increase then.

Concerns about the pace of rate increases so far leading the U.S. economy into a recession have spread in recent months.

Investors also digested economic data released on Thursday, including the GDP reading for the final quarter of 2022. It showed that the U.S. economy expanded by 2.9%, which was just above the 2.8% expected by economists previously surveyed by Dow Jones.

Earnings season also continued to weigh on investors’ minds, with many focusing on companies’ guidance on how they expect the economy to develop. American Express and Chevron ware among those reporting on Friday.

CNBC