On Friday, U.S. Treasury yields decreased as investors evaluated the economy after key economic data releases and pondered the future of interest rates. At 4:48 a.m. ET, the 10-year Treasury yield dropped by over three basis points to 4.5399%, while the 2-year Treasury yield was at 4.9200% after a decrease of more than four basis points. Yields and prices have an inverse relationship, with one basis point representing 0.01%.
Investors were concerned about persistent inflationary pressures following the March producer price index, which tracks wholesale inflation, came in lower than expected with a 0.2% increase from the previous month, compared to the 0.3% increase economists had predicted. This eased some concerns about inflationary pressures but left investors still unsure about potential monetary policy decisions from the Federal Reserve. The market expectations for rate cuts have shifted from June to September after the release of the March consumer price index earlier in the week, which came in higher than expected, leaving some investors believing there may be no rate cuts at all this year.
The Federal Reserve has emphasized that any decisions on rate cuts will be based on data and it is waiting for inflation to decrease before adjusting monetary policy. Investors were awaiting the release of import and export prices and new consumer sentiment data for April as they continued to analyze
