The 10-year U.S. Treasury yield was little moved Friday as investors assessed yet another encouraging inflation reading, suggesting the Federal Reserve can start cutting rates later this year.
The yield on the benchmark 10-year Treasury note was up by less than 1 basis point at 4.141%. The 2-year Treasury note yield was higher by roughly 4 basis points at 4.357%.
Yields move inversely to prices, and a basis point equals 0.01%.
Treasurys
Investors assessed the December's personal consumption expenditures price index, the Fed's preferred inflation reading, which rose 0.2% last month and was up 2.9% from a year ago, excluding food and energy. That's compared to respective increases of 0.2% and 3% anticipated by economists polled by Dow Jones.
The encouraging inflation reading comes after Thursday's surprisingly strong gross domestic product data, which showed the U.S. economy growing at an annualized rate of 3.3%, higher than economists' expectations of 2%.
Thursday's report also showed slowing inflation. In the GDP report, core personal consumption expenditures price index — which the Federal Reserve monitors for longer-term inflation trends — rose by 2.7% on an annual basis, down from 5.9% a year ago.
Investors are closely monitoring the economic data for hints as to when the Fed can start to cut interest rates, as it works to tamp inflation down to its 2% goal. According to the CME FedWatch Tool, markets are currently pricing in a 46% likelihood the central bank will lower by a quarter percentage point in March.
The inflation data "is improving, giving the Fed leeway to cut rates this year," wrote Jeffrey Roach, chief economist at LPL Financial. "However, the Fed has further work to do and should not be tempted to declare 'mission accomplished.'
— CNBC's Jeff Cox contributed to this report.