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Treasury yields moved lower on Friday as energy prices fell despite fresh geopolitical tensions in the Middle East, while traders continued to assess the impact of fresh inflation data on the U.S. economy.
Yields on the 10-year Treasury note — the main benchmark for mortgages, auto loans and credit card debt — fell more than 1 basis point to 4.3725% in early trade.
The yield on the 2-year Treasury note, which closely tracks short-term Federal Reserve interest rate decisions, dropped more than 3 basis points to 4.0860%.
The 30-year Treasury yield, which traditionally moves on geopolitical events, was flat at 4.8532%.
One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.
Treasury yields ended Thursday’s session flat, after annual core inflation hit 3.4% in May, its highest since October 2023 and a 0.3% monthly rise. The shift higher in the Fed’s preferred inflation gauge comes amid an increasingly hawkish tone on inflation from new chairman Kevin Warsh.
Separately, the all-items PCE also printed higher, at a seasonally-adjusted 4.1% annual rate, its highest level since April 2023.
Oil prices were lower early Friday as investors monitored renewed tensions in the Middle East.
U.S. West Texas Intermediate futures were 2.5% lower at $70.11, while Brent crude, the international price benchmark, was last seen at $73.38, a 2.5% dip.
A U.S. official said Iran was responsible for an attack on a cargo ship sailing under a Singapore flag near the Strait of Hormuz, while separately, Iraq said it was considering withdrawing from OPEC amid a dispute over oil output quotas.
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