Treasury yields edged higher on Friday morning, rebounding from moves seen in Thursday’s session.
The yield on the benchmark 10-year Treasury was around 2 basis points higher by 3:50 a.m. ET, trading at 4.036%. On Thursday, it fell by 4 basis points to touch on the 4% level after data prints showed prices were rising while the labor market was weaker than anticipated.
The yield on the 5-year Treasury gained 3 basis points on Friday morning, while 30-year Treasury yields rose by 1 basis point.
One basis point equals 0.01%, and bond yields and prices move in opposite directions.
The U.S. consumer price index rose to 2.9% on an annual basis in August, data showed on Thursday, with the CPI notching its biggest monthly jump since January. Annual core inflation — more closely watched by Fed officials — rose to 3.1%.
The Federal Reserve’s inflation target is 2%.
Meanwhile, the Labor Department reported a higher-than-expected rise in weekly jobless claims, with unemployment compensation filings hitting their highest level since Oct. 2021.
“The latest set of economic numbers likely creates some additional complications for FOMC policymakers as they contemplate their decision-making ahead of the 16-17 September FOMC meeting,” Ryan Wang, U.S. economist at HSBC, said in a Friday note.
“With some apparent tension between the two sides of the Committee’s dual mandate — inflation and employment — we expect the outcome at the meeting itself will be a 25bp reduction in the federal funds target range to 4.00-4.25%. But the full range of new economic projections released at the meeting are likely to reveal some differences in views in terms of which side of the mandate individual FOMC policymakers are more focused on,” he said.