Treasury yields were mixed Friday as investors digested a raft of data releases indicating the U.S. economy continues to withstand inflationary pressures caused by the Iran war and as hostilities in the Middle East intensified overnight.
The yield on the key 10-year Treasury note — the main benchmark for mortgages, auto loans and credit card debt — dropped more than 2 basis points to 4.545%. Longer-dated yields also retreated as government bonds rallied. The 30-year Treasury yield, which tends to track broader geopolitical events, was 3 basis points lower at 5.067%.
Conversely, shorter-dated yields rose. The yield on the 2-year Treasury note, which typically moves in line with short-term Federal Reserve interest rate decisions, was up more than 2 basis points at 4.179%.
One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.
The slide in borrowing costs follows cooler-than-expected producer and consumer price data this week, while U.S. jobless claims for the week ending July 11 came in lower than forecasted, at a seasonally-adjusted 208,000.
Traders continue to monitor escalating tensions between the U.S. and Iran, which pushed energy prices higher on Friday, and the potential impact on the Federal Reserve's interest rate path.
U.S. West Texas Intermediate futures for August delivery settled 4.48% higher at $82.49 per barrel, while Brent crude — the international price benchmark — closed up 4.59% at $88.10.
That said, the University of Michigan's index on consumer sentiment rose to 54.4, topping a Dow Jones consensus of 50.5.
"This month's rise in sentiment was pervasive across the population, seen across groups by age, income, wealth, and political party" though "sentiment's upward momentum may prove difficult to sustain if recent declines in gas prices continue to reverse course," said survey director Joanne Hsu.