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Treasury yields little changed after US says economic growth slowed in the second quarter

U.S. government debt yields were littled changed Friday after a Commerce Department report suggested that global growth concerns and trade war fears kept business investment lower in the second quarter despite a better-than-expected headline GDP print.

While overall GDP growth slowed to 2.1% from 3.1% in the prior quarter, the print still topped Dow Jones expectations of just 2% growth. A surge in personal consumption helped propel GDP in the month between April and June while a slowdown in business investment weighed on the results.

At around 4:22 p.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was little changed at 2.074%, while the yield on the 30-year Treasury bond was slightly lower at 2.594%.

The personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge, rose 2.3% annualized in the second quarter, up from 0.8% in the first quarter. The core print, which excludes food and energy, was 1.8% in the second quarter, up from 1.1% between January and March.

"The deceleration in real GDP in the second quarter reflected downturns in inventory investment, exports, and nonresidential fixed investment," the Commerce Department said in a press release. "These downturns were partly offset by accelerations in PCE and federal government spending."

The GDP print could have implications for the Fed and the direction of monetary policy when the central bank concludes its regular two-day meeting on Wednesday. Investors have been considering whether the Fed might not be as dovish as expected when it meets next week, but Wall Street still believes it will elect to cut rates by 25 basis points.

"As expected, inventories and trade were the major drags in the second quarter, after being big positives for growth in the first quarter," wrote PNC Chief Economist Gus Faucher. "Still, the U.S. economy, which has been growing for more than 10 years, will continue to expand at least through the rest of 2019 and into 2020."

"Growth will slow, however, due to less fiscal stimulus as the impact of the 2017 tax cuts fades, slower labor force growth, and weaker global economic growth," he added.

On Thursday, the European Central Bank said that the risk of a recession in the region is low and decided to leave rates unchanged.