WASHINGTON (dpa-AFX) - After trending higher over the past several sessions, treasuries showed a modest move back to the downside during trading on Friday.
Bond prices moved lower early in the session and remained in negative territory throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.0 basis points to 4.227 percent.
The pullback by treasuries came following the release of a closely watched Commerce Department report showing U.S. consumer prices increased in line with estimates in the month of July.
While the data has increased confidence the Federal Reserve will lower interest rates next month, a September rate cut may already be priced into the markets.
CME Group's FedWatch toll is currently indicating an 87.1 percent chance the Fed will lower rates by a quarter point at its next monetary policy meeting.
The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.2 percent in July after climbing 0.3 percent in June. The uptick matched expectations.
The annual rate of growth by the PCE price index in July came in unchanged from June at 2.6 percent, which was also in line with estimates.
Excluding food and energy prices, the core PCE price index rose by 0.3 percent in July, matching the increase seen in June as well as expectations.
The annual rate of growth by the core PCE price index ticked up to 2.9 in July from 2.8 percent in June. The slight acceleration also matched estimates.
Traders also kept an eye on developments in Washington, D.C., where a District Court Judge held a hearing on Federal Reserve Governor Lisa Cook's request to temporarily block President Donald Trump's attempt to remove her from her position.
The hearing ended without District Judge Jia M. Cobb issuing a ruling, leaving Cook's fate up in the air going into the long week.
Following the long Labor Day weekend, next week's trading may be impacted by reaction to the closely watched monthly jobs report along with reports on manufacturing and service sector activity.
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