(RTTNews) – Treasuries saw continued weakness during trading on Friday, extending the downward move seen over the two previous sessions.
Bond prices regained some ground after an early slump but slid firmly back into negative territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.5 basis points to 4.139 percent.
The ten-year yield has shot up by 11.3 basis points over the past three days, reaching its highest closing level in two weeks.
Concerns about the outlook for interest rates continued to weigh on treasuries even after the Federal Reserve’s widely expected rate cut on Wednesday.
While the Fed lowered interest rates by a quarter point, bond traders seem disappointed officials don’t appear eager to cut rates aggressively, with only newly sworn in Fed Governor Stephen Miran preferring to lower rates by half a point.
“The strong vote for the 25-basis-point cut suggests that members, while acknowledging that downside risks to the job market have increased, are not panicking about the state of the economy,” said Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni.
The latest forecasts also suggest Fed officials expect two more rate cuts this year but just one next year, although there were significant differences of opinion about the outlook.
Closely watched readings on consumer price inflation are likely to attract attention next week along with reports on new and existing home sales and durable goods orders as well as speeches by Fed Chair Jerome Powell and other Fed officials.
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