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Treasury Yields Dip as Key Inflation Metric Shows Possible Slowdown in Rising Prices

Source: NYSE

U.S. Treasury yields slipped on Friday morning as fears over the Federal Reserve's plans to aggressively hike interest rates appeared to ease and a key inflation reading showed a slowing rise in prices.

The yield on the benchmark 10-year Treasury note moved lower by 1 basis point to 2.743%. The yield on the 30-year Treasury bond fell 2 basis points to 2.972%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

On Friday, the Fed's preferred inflation metric showed a 4.9% year-over-year rise in April. This result matched expectations and could be a sign that inflation is starting to decline.

Bhanu Baweja, chief strategist at UBS Investment Bank, told CNBC's "Squawk Box Europe" on Friday that his firm believes inflation has reached its peak and readings on price growth may start to fall.

"In the meantime, we think the U.S. economy is in decent shape, there's no doubting the fact that it's late cycle but recession's not imminent, and by the way, I don't think the markets think it's imminent," Baweja said.

Treasury yields have mostly moved lower this week, as investors sought shelter from heavy selling in stock markets. Disappointing earnings from a number of technology stocks have fueled fears that a slowdown in economic growth could be starting to show through in company data.

The Fed's plans to aggressively raise interest rates to combat inflation had caused concern among investors that this would contribute to an economic downturn.

Minutes from the central bank's May meeting, released on Wednesday, showed that the Fed saw a need to raise rates quickly and potentially go further than the market had expected. However, stocks rose on Wednesday afternoon, indicating that investors were largely unsurprised by the minutes.

In economic news, personal income rose 0.4% in April. Economists surveyed by Dow Jones were looking for a 0.5% gain.

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