Government bond yields fall faster than inflation rates

US Treasury yields fell Friday morning ahead of the release of key inflation data.

The 10-year Treasury benchmark yield fell 2 basis points to 2.8386% at 3:40 am ET. The yield on the 30-year government bond fell 1 basis point to 2.9145%. Yields move inversely to prices and 1 basis point equals 0.01%.

The March Personal Consumer Expenditure Index comes out at 8:30 a.m. ET. Core PCE is the Federal Reserve’s primary inflation gauge.

Rising inflation and the Fed’s plans to aggressively raise interest rates to combat these price pressures have fueled investor concerns about a slowdown in economic growth.

These concerns have led investors to sell their bonds recently, pushing yields up.

However, Peter Oppenheimer, chief global equity strategist, head of macro research in Europe at Goldman Sachs, emphasized that before the global financial crisis, 10-year government bond yields were above 4%.

Oppenheimer told CNBC’s “Squawk Box Europe” on Friday that while he doesn’t predict yields will reach this level again, he believes there is “room for them to move higher, if inflation stays more entrenched and we don’t get a recession.” .”

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The war between Russia and Ukraine, which has fueled inflation, has also contributed to this fear of economic growth. President Joe Biden has asked Congress to approve $33 billion in additional aid for the war in Ukraine.

In terms of other data coming out on Friday, the first quarter employment cost index will be out at 8:30 a.m. ET.

The University of Michigan’s final consumer confidence reading for April is scheduled to be released at 10 a.m. ET.

No auctions are scheduled for Friday. employees contributed to this market report.

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