Treasury yields rise as investors look to Fed speakers for hints about U.S. economic outlook

U.S. Treasury yields climbed as investors a weighed the outlook for the U.S. economy and remarks from Federal Reserve speakers.

The benchmark 10-year Treasury was trading at 3.488% after rising by 8 basis points. The yield on the 2-year Treasury was last up by more than 6 basis points at 4.177%.

Yields and prices have an inverted relationship. One basis point equals 0.01%.  


Investors have been considering whether the Fed will hike rates by 50 basis points or slow the pace of rate increases to 25 basis points when its next meeting ends on Feb. 1. They have therefore been closely following remarks from Fed speakers and scanning them for hints about the central bank's view.

On Friday Fed Governor Waller said he backs a quarter percentage point interest rate increase at the central bank's next meeting. He also said he would tolerate a soft recession if it meant bringing inflation down.

Thursday's initial jobless claims reflected resilience in the labor market as figures declined to their lowest level since late June. Tightness in the labor market is one of the areas the Fed has been targeting in its fight against persistently high inflation. 

Meanwhile, wholesale inflation figures released earlier in week showed that prices fell by more than expected throughout December, prompting some investors to believe that peak inflation has passed.