Treasury yields finished lower on Friday in the absence of any major U.S. economic data or appearances by Federal Reserve officials.
What happened
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The yield on the 2-year Treasury
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fell 2.5 basis points to 4.687%, from 4.712% on Thursday. Friday’s level is still the second-highest of the year, based on 3 p.m. Eastern time figures from Dow Jones Market Data. For the week, the 2-year rose 3.3 basis points and was up for the fourth straight week. -
The yield on the 10-year Treasury
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dropped 6.8 basis points to 4.258%, from 4.326% on Thursday. The rate fell 3.6 basis points for the week. -
The yield on the 30-year Treasury
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declined 8.2 basis points to 4.379%, from 4.461% on Thursday. For the week, the rate dropped 6.9 basis points. - 10- and 30-year rates finished at their lowest levels since Feb. 12-15.
What drove markets
Friday brought a lack of any major catalysts for bond traders. Instead, Wall Street was bracing for another round of U.S. data next week that could show continued strength in the world’s largest economy.
Next Wednesday, the first revision to fourth-quarter gross domestic product is set to be released. That will be followed the next day by January’s reading on the Federal Reserve’s preferred inflation gauge, the personal-consumption expenditures, or PCE, price index.
Read: ‘No-landing’ scenario and strong stock market raise the risk of a bonds selloff
In a speech delivered late Thursday, Fed Gov. Lisa Cook said central bankers need greater confidence that inflation is converging to 2% before cutting interest rates. Meanwhile, her colleague Christopher Waller made a similar point Thursday evening, saying there’s no rush to reduce borrowing costs.
What analysts are saying
The next move in interest rates by the Federal Reserve could actually be up, said former U.S. Treasury Secretary Larry Summers, citing the strength of the economy and “increasing evidence that inflation may be less down for the count than many people supposed.”
He said four rate cuts — as Goldman Sachs economists are expecting — could well happen, “but is a probably above the center of mass of what I think.”