The yield on the 10-year Treasury note remained unchanged on Friday as investors deliberated over encouraging revisions to the consumer price index, revealing a slower pace of inflation than previously indicated for December.
At 4.173%, the 10-year Treasury yield held steady, while the yield on the 2-yea23r Treasury saw a modest increase of over 2 basis points to 4.482%. The movement of yields and prices runs counter to each other, with one basis point equivalent to 0.01%.
On Friday, the Bureau of Labor Statistics within the Labor Department unveiled revisions to the consumer price index, indicating a 0.2% rise in inflation for December, which was lower than initially stated. Following this report, Treasury yields briefly dipped.
Recent data releases continue to underscore the economy’s enduring strength and the resilience of the labor market.
Notably, the initial weekly jobless claims data released on Thursday showed a figure of 218,000, below the 220,000 expected by economists surveyed by Dow Jones.
The data contributes to the anticipation that the Federal Reserve will probably delay reducing interest rates, coinciding with increasing speculation regarding the schedule for such reductions.
Statements from Federal Reserve officials in recent weeks indicate a more careful approach towards rate cuts, disappointing investors who had hoped for one as early as March.
Statements from policymakers have also heightened worries that there might be fewer rate reductions this year than initially anticipated.
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, expressed on CNBC’s “Squawk Box” on Wednesday his expectation of two or three rate cuts in 2024.
