The Federal Reserve
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Treasury yields were little changed Friday after data on U.S. industrial activity showed April expansion slightly weaker than expected.
The yield on the US Treasury at 10 years rating – the key benchmark for mortgages and auto loans – fell 2 basis points to 4.37%. THE 2-year Treasury bill the yield, which more closely tracks the Federal Reserve’s short-term interest rate policy, fell just over a basis point, to 3.873%.
One basis point is 0.01%, and yields and prices move in opposite directions.
On Friday, the Institute for Supply Management’s manufacturing index for April totaled 52.7, unchanged from March and slightly below the 53.0 expected by economists surveyed by Dow Jones.
The prices paid component of the index rose to its highest level since April 2022 as businesses faced higher energy costs following the war in Iran, as well as high tariffs.
“Definitely, the ISM manufacturing index maintains its expansionary trend for 2026, which is a good thing for the economic outlook,” said Chris Rupkey, chief economist at FWDBONDS. “The only troubling finding is that inflation is surging in a way that has not been seen since 2022.”
The Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred measure of inflation, rose 0.7% in March, the Commerce Department said Thursday. That put the annual inflation rate in line with Wall Street forecasts, at 3.5%, but well above the Federal Reserve’s 2% target.
Core PCE, which excludes volatile food and energy prices, was lower than the overall figures, increasing 0.3% in March from February and 3.2% from the same period last year.
The Commerce Department also reported Thursday that first-quarter gross domestic product grew at a seasonally adjusted annual rate of 2%, up from 0.5% in the fourth quarter of 2025, but lower than Wall Street economists’ consensus estimate of 2.2%.
Earlier this week, the Fed voted to keep the benchmark federal funds rate between 3.50% and 3.75%.
— CNBC’s Lim Hui Jie also contributed to this report.