Traders work on the floor at the New York Stock Exchange in New York City, U.S., March 27, 2025.
Treasury yields fell on Friday after new inflation data showed persistent price pressures.
The yield on the benchmark 10-year Treasury note declined by 11.8 basis points, trading at 4.251%. The 2-year Treasury yield fell by 9 basis points to 3.908%.
One basis point is the equivalent of 0.01%. Bond yields and prices move in opposite directions.
Investors digested data from the Federal Reserve's key inflation measure that showed a higher-than-expected rise in February. The core personal consumption expenditures price index showed a 0.4% increase for the month, putting the 12-month inflation rate at 2.8%. Economists surveyed by Dow Jones had been looking for respective numbers of 0.3% and 2.7%.
"This upward trend in surprises is underscored by the fact that this is the second-largest core PCE print in the last 24 months, highlighting persistent inflationary pressures," said Dan Siluk, head of global short duration and liquidity and portfolio manager at Janus Henderson.
"Such resilience in core inflation, persistently above the Federal Reserve's target, suggests expectations for a shift in monetary policy may need to be recalibrated, potentially affecting the timing of interest rate adjustments," Siluk said.
A report from the Bureau of Economic Analysis also showed that consumer spending accelerated 0.4% for the month, below the 0.5% forecast. That came as personal income posted a 0.8% rise, against the estimate for 0.4%.
Money Report
The broader potential effect of tariffs remains in focus, after President Donald Trump this week announced new 25% duties on all cars "not made in the United States." The levies will come into effect April 2. Trump later threatened to impose "far larger" tariffs on Canada and the European Union, should they cooperate to "do economic harm to the USA."
— CNBC's Sarah Min and Jeff Cox contributed to this report.
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