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Yields on U.S. Treasurys held steady during Friday’s pre-holiday shortened session after data showed inflation continuing to slow in November and moving toward the Federal Reserve’s target.
What yields are doing
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The yield on the 2-year Treasury note
BX:TMUBMUSD02Y
was at 4.34%, down slightly from 4.349% at 3 p.m. Eastern time on Thursday. Thursday’s finish was the lowest since June 1, according to Dow Jones Market Data. Yields and debt prices move opposite each other. -
The 10-year Treasury note
BX:TMUBMUSD10Y
yielded 3.889%, down from 3.893% on Thursday afternoon. -
The 30-year Treasury bond yield
BX:TMUBMUSD30Y
was up at 4.042% from 4.034% late Thursday.
What’s happening
Treasury yields initially ticked higher after the government said the personal-consumption expenditures, or PCE, index dipped 0.1% last month. Year-over-year inflation slowed to 2.6% from 2.9% in October, the lowest since February 2021.
The more closely followed core PCE rate that excludes food and energy rose 0.1% in November, matching the forecasts of economists polled by The Wall Street Journal. The increase in the core rate over the past 12 months decelerated to 3.2% from 3.4% in the prior month. That’s also the smallest increase since early 2021.
Live blog: PCE report for November
In other data, consumer sentiment ended the year on a high note, based on an index from the University of Michigan. Orders for durable goods rebounded 5.4% in November, the government said Friday, the largest gain since July 2020. And new home sales plunged last month.
U.S. bond traders will see a shortened session Friday, with Sifma calling for a 2 p.m. Eastern time close. U.S. equity markets see a full day of trading. Financial markets will be closed Monday for Christmas Day.
What analysts say
“It was a softer inflation print to be sure, although we’ll argue the market was biased for a downside surprise which has translated to a somewhat counterintuitive price response” initially, said Benjamin Jeffery, rates strategist at BMO Capital Markets, in a note.
