U.S. Treasury yields climbed on Friday as markets absorbed the latest economic data and investors considered what it may mean for interest rates.
The 10-year Treasury yield was trading 4 basis points higher at 4.332%. The 2-year Treasury yield was last up by more than 2 basis points to 5.039%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Treasurys
Investors considered the outlook for interest rates and looked to economic data ahead as they digested this week's inflation reports.
Economic data points Friday provided a mixed bag on inflation: Import prices rose 0.5% in August, more than expected, on the back of higher energy costs, while export prices jumped 1.3%. Both were the highest in more than a year.
However, the University of Michigan's consumer sentiment report showed a sharp drop in inflation expectations. The one-year outlook slid to 3.1%, while the five-year outlook dropped to 2.7%. Those were tied for multiyear lows and likely to play a role in the Federal Reserve's thinking when it meets next week.
Those reports followed data earlier in the week on consumer and producer prices that also reflected inflation that was moderating, at least at the core level.
On Thursday, the producer price index suggested bearable levels of inflation as it increased by 0.7% on a monthly and 1.6% on an annual basis in August. Economists previously surveyed by Dow Jones had estimated a 0.4% monthly increase. The core PPI, which excludes food and energy prices, came in at 0.2% for the month, in line with expectations.
The consumer price index for August, which was published Wednesday, reflected a 0.6% rise in August and a 3.7% increase year over year. The annual figure was 0.1% above estimates.
Also on Thursday, retail sales data came in far stronger than expected at 0.6% for August, higher than the previously anticipated 0.1%, suggesting consumer resilience.
Investors considered what the data could mean for Fed monetary policy after concerns about rates going higher still have grown. That was prompted by strong economic data and comments from Fed officials that left the possibility of further rate hikes on the table.
The Fed is due to meet next week and markets are widely expecting rates to be kept unchanged. However, the picture is less clear beyond then and investors will be looking for guidance about what to expect from the Fed's policy decisions slated for November and December. Â