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investors await key inflation report

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investors await key inflation report

Treasury yields climbed on Friday after a key inflation report showed a cooldown in prices in December.

The yield on the benchmark 10-year Treasury was up by over 5 basis points to 3.546%. The 2-year Treasury yield was last trading at 4.216% after rising by around 4 basis points.

Yields and prices have an inverted relationship and one basis point equals 0.01%.

The core personal consumption price expenditures index, considered a key inflation measure by the Federal Reserve, rose by 4.4% from a year ago in December, the Commerce Department reported Friday. That was in line with the Dow Jones estimate.

The data could impact the Fed’s next interest rate decision, which is expected at the conclusion of its next meeting on Feb. 1. Many investors are hoping for the central bank to slow the pace of interest rate hikes further and announce a 25 basis point increase then.

Concerns about the pace of rate increases so far leading the US economy into a recession have spread in recent months.

Investors also digested economic data released on Thursday, including the GDP reading for the final quarter of 2022. It showed that the US economy expanded by 2.9%, which was just above the 2.8% expected by economists previously surveyed by Dow Jones.

Earnings season also continued to weigh on investors’ minds, with many focusing on companies’ guidance on how they expect the economy to develop.

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