Most U.S. Treasury prices edged higher on Friday, though long bond prices rallied, as investors focused on inflation concerns, two days after the Federal Reserve played down a recent uptick in consumer price pressures.
Benchmark 10-year notes were last down 2/32 in price to yield 2.63 percent, up from 2.62 at mid-day on Friday. The notes yielded 3 percent at the beginning of the year. The 30-year bond rose 7/32 in price to yield 3.46 percent, up from 3.45 earlier on Friday. The 2-year note saw no change in price to yield 0.46 percent, unchanged from Friday's mid-day trading.
The Fed took a more dovish tone than many expected at its June meeting, leading to volatile changes in trading positions, even though benchmark 10-year yields on Friday ended little changed from before the meeting.
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The long-dated yield curve steepened to two-week highs early on Friday as investors focused on the prospect of higher inflation, before buying of 30-year bonds erased some of the move.
"There's the thought I think that maybe (the Fed) will let inflation run a little bit higher and not raise rates,'' said Dan Mulholland, managing director in Treasuries trading at BNY Mellon in New York.
Data on Friday showed that higher energy costs pushed Canada's annual inflation rate to a 27-month high of 2.3 percent in May.