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2-year, 10-year Treasury yields at highest levels since December after modest CPI revisions


Treasury yields finished higher on Friday, after minor revisions to U.S. inflation data reinforced investors’ economic optimism.

What happened

  • The yield on the 2-year Treasury
    BX:TMUBMUSD02Y
    rose 3.2 basis points to 4.486%, from 4.454% on Thursday. For the week, the rate climbed 11.8 basis points.

  • The yield on the 10-year Treasury
    BX:TMUBMUSD10Y
    advanced 1.7 basis points to 4.186%, from 4.169% on Thursday. It rose 15.6 basis points this week.

  • The yield on the 30-year Treasury
    BX:TMUBMUSD30Y
    was marginally higher at 4.380%, versus 4.376% on Thursday. It rose 15.4 basis points this week.

  • Friday’s levels for the 2- and 10-year rates were the highest since Dec. 12, based on 3 p.m. Eastern time figures from Dow Jones Market Data. The 2-,10- and 30-year rates each posted their biggest weekly advances since the period that ended on Jan. 19.

What drove markets

Friday’s round of data brought only small adjustments to the consumer-price index for the final months of 2023.

The reading for December was revised down by a tenth, to 0.2%, while November’s was upwardly revised by the same magnitude, to 0.2%. Meanwhile, the annual core inflation rate for the fourth quarter remained the same at 3.3% after seasonal factors.

Analyst regarded the CPI revisions as rather minor, considering the risk of changes that could have showed inflation was running hotter than initially reported.

Dallas Fed President Lorie Logan, during an appearance on Friday, said she sees no urgency for the Federal Reserve to lower interest rates.

What analysts are saying

“The focus next week will be the CPI report” for January released on Tuesday, said U.S. economist Michael Reid of RBC Capital Markets.

“Our forecast calls for a [month-over-month] rise of 0.2% in headline and 0.3% in core,” Reid wrote in a note on Friday. “This would bring the [year-over-year] pace to 2.9% and 3.8% for headline and core, respectively. While the progress in core on a [year-over-year] basis is sluggish, a monthly 0.3% print is consistent with the ‘more good data’ that the Fed wants to see.”



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