Treasury yields rose slightly on Friday as investors considered what is next for the U.S. economy and awaited remarks from Federal Reserve officials, which could provide hints about monetary policy plans.
As of 4 a.m. ET, the yield on the 10-year Treasury was up by just over three basis points to 3.4822%, making up some of Thursday’s declines. The 2-year Treasury yield was last almost flat at 4.2476%.
Yields and prices have an inverted relationship. One basis point equals 0.01%.
After retail sales figures for November came in weaker than expected on Thursday, investors mulled over the outlook for the U.S. economy. Fears about a looming recession related to the Fed’s aggressive rate hikes throughout 2022 have mounted in recent weeks.
On Wednesday, the central bank had announced a 50 basis point increase to interest rates, a slight decline from the 75 basis point hikes implemented at the previous four Fed meetings.
The central bank also indicated that rates would stay elevated for longer, with Chairman Jerome Powell reiterating that the battle against inflation must be continued.
A series of Fed officials are due to give remarks on Friday and in the coming week. Investors will be scanning these for insights about the central bank’s expectations for the economy and its policy plans.
On the data front, December’s flash purchasing managers’ index (PMI) figures for services and manufacturing industries will be released on Friday. The data reflects whether economic activity is growing or contracting, and at which pace.
