investors await key inflation data


U.S. Treasury yields fell on Friday as investors awaited economic data that could affect Federal Reserve interest rate policy and as debt ceiling deal talks continued.

At 5:51 a.m. ET, the yield on the 10-year Treasury was down by 3 basis points at 3.783%. The 2-year Treasury yield was trading at 4.491% after falling by close to two basis points.

Yields and prices move in opposite directions. One basis point equals 0.01%.

Investors awaited Friday’s release of the personal consumption expenditures price index for April, which is the Fed’s preferred inflation gauge. In recent weeks, Fed officials have given mixed messages about what could be next for interest rates.

Some have indicated that they would prefer to pause the Fed’s rate-hiking campaign as they do not believe the full effect of elevated rates has filtered through to the economy yet. Others appeared to believe further rate hikes may be necessary to bring inflation down, or said decisions would depend on upcoming economic data.

April’s personal spending and income reports and durable goods orders data are also expected Friday.

Investors continued to watch debt ceiling deal negotiations as the June 1 deadline at which the U.S. could default on its debt obligations draws closer. Talks seemed to progress closer to a deal on Thursday, but “sensitive issues” were still being discussed, Republican negotiator Rep. Patrick McHenry said Thursday.