10-year Treasury yield falls from 15-year high after Fed's preferred inflation gauge eases

The U.S. 10-year Treasury yield fell on Friday, pulling back from a fresh 15-year high, after the Federal Reserve's preferred inflation measure showed some signs of easing inflation.

The yield on the benchmark 10-year Treasury note slipped more than 1 basis point to 4.583%, down from 4.688% on Thursday — its highest level since Oct. 15, 2007 when it yielded as much as 4.719%.

The yield on the 30-year Treasury bond also dipped more than 2 basis points to 4.708%. The 2-year Treasury yield declined by around more than 1 basis point to 5.058%.

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


Those moves come after the August personal consumption expenditures price index reading, which is the Federal Reserve's preferred inflation gauge, came in lighter than expected on a monthly basis. So-called core PCE, which strips out volatile food and energy prices, rose 0.1% in August and 3.9% year over year. Economists polled by Dow Jones anticipated core PCE would gain 0.2% on a monthly basis and 3.9% year over year.

Investors also watched for news around the potential government shutdown. House GOP leaders failed to pass a short-term spending bill on Friday, increasing concerns that federal lawmakers wouldn't reach an agreement on time

Minneapolis Fed President Neel Kashkari told CNBC's "Squawk Box" on Wednesday that he was not sure if interest rates have been raised enough to successfully tackle inflation. Some of his concerns stem from the fact that sectors of the economy that normally are affected by rate hikes seem to be ignoring them.

Earlier this month, the Federal Reserve said that it expects to hike rates another quarter point this year and warned that borrowing costs will stay higher for longer.

— CNBC's Jeff Cox, Sarah Min and Lisa Kailai Han contributed to this report.