investors await major inflation numbers

US Treasury yields fell Friday as investors waited for economic data that could affect the Federal Reserve’s interest rate policy and as debt ceiling talks continued.

At 5:51 a.m. ET, the yield on the 10-year Treasury was down 3 basis points to 3.783%. The yield on 2-year government bonds was 4.491% after falling almost two basis points.

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

Treasure Chests

US1M 1 month US Treasury 6.026% +0.327 0.00%
US3M US Treasury at 3 months 5.447% +0.075 0.00%
US6M US Treasury at 6 months 5.493% +0.061 0.00%
US1J US Treasury at 1 year 5.261% +0.025 0.00%
US2Y US Treasury at 2 years 4.485% -0.025 0.00%
US10Y US Treasury at 10 years 3.781% -0.034 0.00%
US30Y US Treasury of 30 years 3.97% -0.034 0.00%

Investors awaited Friday’s release of the personal consumer spending index for April, the Fed’s preferred inflation gauge. In recent weeks, Fed officials have issued mixed messages about what the future might hold for interest rates.

Some have indicated that they prefer to pause the Fed’s rate hike campaign, as they do not believe the full effect of the rate hikes has yet filtered through to the economy. Others seemed to believe that further rate hikes might be necessary to bring inflation down, or said decisions depend on upcoming economic data.

April’s personal spending and income reports and data on durable goods orders are also expected on Friday.

Investors continued to monitor debt ceiling negotiations as the June 1 deadline for the US to default on its debt obligations approaches. Talks appeared to be moving closer to a deal Thursday, but “sensitive issues” were still being discussed, Republican negotiator Rep. Patrick McHenry Thursday.

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