U.S. Treasury yields fell on Friday when a volatile week, in which central banks around the world indicated a more aggressive effort to curb rising inflation, closed.
At around 5:27 am ET, the 10-year benchmark Treasury bond yield was 9 basis points below 3.214%, while the 30-year Treasury bond yield also fell 9 basis points to 3,271 %. Yields move inversely to prices. The 2-year return, which is usually more sensitive to changes in monetary policy, was flat at 3.164%.
The S&P 500 is on the verge of heavy weekly losses as investors flee risky assets amid fears that a tougher monetary policy tightening could plunge the U.S. economy into recession. Some investors sold shares and traded bonds on Thursday, raising Treasury prices and lowering yields.
The Federal Reserve on Wednesday raised its fund benchmark rate by 75 basis points, the biggest rise since 1994, with annual US inflation at a 40-year high of 8.6% in May.
Members of the Federal Open Market Committee reiterated the Fed’s commitment to stabilizing inflation and indicated that a stronger path to rate hikes is expected. Officials also cut their economic growth outlook for 2022 to just 1.7% from 2.8%.
The Swiss National Bank then surprised markets with its first rate hike in 15 years on Thursday, while the Bank of England implemented its fifth consecutive rise.
Friday is a relatively light day for economic data, with industrial production data for May ahead of the opening bell.