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Treasury yields tumbled Friday as investors digest a raft of data releases indicating the U.S. economy continues to withstand inflationary pressures caused by the Iran war, as hostilities in the Middle East intensified overnight.
Yields on the key 10-year Treasury note — the main benchmark for mortgages, auto loans and credit card debt — dropped more than 4 basis points to 4.5254% in early trade.
Shorter- and longer-dated yields also retreated as government bonds rallied. The yield on the 2-year Treasury note, which typically moves in line with short-term Federal Reserve interest rate decisions, shed 4 basis points to reach 4.1134%.
The 30-year Treasury yield, which tends to track broader geopolitical events, was more than 2 basis points lower at 5.0680%.
One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.
The slide in borrowing costs follows cooler-than-expected producer and consumer price data this week, while U.S. jobless claims for the week ending July 11 came in lower than forecasted, at a seasonally-adjusted 208,000.
Traders continue to monitor escalating tensions between the U.S. and Iran, which pushed energy prices higher on Friday, and the potential impact on the Federal Reserve’s interest rate path.
U.S. West Texas Intermediate futures for August delivery were last seen 0.73% higher at $79.53, while Brent crude — the international price benchmark — was up 0.24% at $84.49.
Bond yields surged during Thursday’s session after Washington and Tehran earlier exchanged fresh strikes and threatened each other’s infrastructure assets in the region.
Key data releases expected Friday include U.S. housing starts and building permit approvals for June.
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