U.S. Treasury yields slipped on Friday as investors set their sights on the Federal Reserve's upcoming policy meeting.
The yield on the 10-year Treasury was down about 2 basis points at 3.661%. The 2-year Treasury yield was nearly 6 basis points lower at 3.589.
Yields and prices have an inverted relationship. One basis point equals 0.01%.
Attention began to turn to the Federal Reserve meeting next week at which the central bank is widely expected to cut interest rates. Traders were last pricing in a 59% chance of a 25-basis-point rate cut and a 41% probability of a 50-basis-point reduction, according to CME Group's FedWatch Tool.
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The Fed's meeting is set to begin Tuesday and conclude Wednesday with the interest rate decision and a postmeeting press conference. The central bank will also release its latest economic projections then.
Two key data points were released earlier this week: the consumer price index and producer price index. Both seemed to support the case for a rate cut as they suggested inflationary pressures are easing.
Data published Wednesday showed that headline CPI increased 0.2% in August, as expected, while the core figure came in at 0.3% on a monthly level, just above the 0.2% forecast. On Thursday, the PPI for August showed that wholesale prices rose 0.2% in the month, also in line with expectations.
Money Report
Also on Thursday, weekly initial jobless claims came in higher than expected at 230,000, more than the 225,000 Dow Jones estimate.
Correction: The Fed is expected to cut rates by 25 basis points. A previous version misstated the magnitude of the rate cut.
