U.S. Treasury yields were mixed on Friday as investors continued to assess the risk of an economic downturn.
The yield on the benchmark 10-year Treasury note was trading marginally lower at 2.972%, paring losses after falling to 2.941% earlier in the session — its lowest level since June 6. Meanwhile, the yield on the 30-year Treasury bond rose 3 basis points to 3.158%.
The 2-year Treasury rate, which is typically more sensitive to U.S. monetary policy changes, was down around 2 basis points at 2.912%. The 2-year note reversed some of its losses after falling to a one-week low of 2.895%. Yields move inversely to prices.
The S&P 500 on Thursday closed out its worst first half in decades. The broader market index dropped 20.6% for its largest first-half decline since 1970.
The steep first-half losses come at a time when market participants are grappling with soaring inflation and tighter monetary policy.
The core personal consumption expenditures price index, the Fed’s preferred inflation measure, rose 4.7% in May, the Commerce Department reported Thursday. That’s 0.2 percentage points less than the month before, but still around levels last seen in the 1980s. The index was expected to show a year-over-year increase of 4.8% for May, according to Dow Jones.
Stubbornly high inflation levels and the Federal Reserve’s efforts to tackle a surge in prices have resulted in escalating recession worries.
On the data front, a final reading of the S&P Global manufacturing purchasing managers’ index for June will be released at 9:45 a.m. ET.
Institute for Supply Management manufacturing data for June, construction spending for May and light vehicle sales for June will all be released at 10 a.m. ET.
Image source: Pixabay