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10-year Treasury yield rises slightly, building on Thursday’s jump above 2%

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U.S. Treasury yields ticked up on Friday, with the benchmark 10-year rate seen holding above the 2% level following the hottest inflation reading in four decades.

The yield on the benchmark 10-year Treasury note rose more than 1 basis point to 2.045%. The move comes shortly after the yield, which serves as a reference point for financial assets worldwide, climbed above 2% for the first time since August 2019 in the previous session. Yields move inverse to prices and a basis point equals 0.01%.

The 2-year yield, which saw its biggest one-day move since 2009 on Thursday, rose nearly 4 basis points to 1.586%

Treasurys

The yield on the 30-year Treasury bond, meanwhile, fell 2 basis points to trade at 2.28%.

The yield on the 2-year Treasury bond, the most sensitive duration to interest rates, was last seen trading at 1.61%. The 2-year surged 26 basis points at one point on Thursday, marking its biggest single-day move since 2009.

This comes after the Bureau of Labor Statistics reported on Thursday that the consumer price index had risen 7.5% in January from a year earlier, the fastest pace of U.S. inflation since February 1982.

The hotter-than-expected inflation reading prompted St. Louis Fed President James Bullard to call for accelerating rate hikes — a full percentage point increase by the start of July. However, other Fed officials have pushed back against the idea of a 50-basis point hike following the CPI report, according to reporting by CNBC’s Steve Liesman.

The futures market also repriced rate-hike odds as CME data pointed to a near-100% chance of a 50-basis-point increase at the March meeting, but that had retreated to about a 66% chance on Friday morning.

Elsewhere, the University of Michigan’s preliminary consumer sentiment reading for February came in at 61.7, falling from 67.2 the previous month and missing expectations.

— CNBC’s Yun Li contributed to this report.

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