WASHINGTON (dpa-AFX) - After showing a strong move to the upside early in the session, treasuries showed a notable downturn over the course of the trading day on Friday.
Bond prices pulled back well off their early highs, eventually ending the day modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 1.2 basis points to 4.285 percent.
The ten-year yield fell as low as 2.236 percent in early trading, but the turnaround lifted it to its highest closing level in almost two months.
The downturn by treasuries came as bond market trading continued to be largely driven by reaction to crude oil prices.
Treasuries initially benefitted from a pullback by the price of crude oil, with crude for April delivery plunging by as much as 3.9 percent after skyrocketing over the course of the previous session.
However, crude oil prices recovered from the early pullback and moved sharply higher over the course of the session, leading to the downturn by treasuries.
The volatility shown by oil comes as President Donald Trump has ramped up his rhetoric against Iran, calling the regime 'deranged scumbags' that he has the 'great honor' to kill.
On the U.S. economic front, a typically closely watched Commerce Department report showed the annual rate of consumer price growth unexpectedly slowed in January.
The Commerce Department said the annual rate of growth by its PCE price index slipped to 2.8 percent in January from 2.9 percent in December. The annual rate of growth was expected to remain unchanged.
Meanwhile, the annual rate of growth by the core PCE price index, which excludes food and energy prices, ticked up to 3.1 percent in January from 3.0 percent in December. Economists had the pace of growth to remain unchanged.
A separate report from the Commerce Department showed U.S. economic growth slowed by much more than previously estimated in the fourth quarter of 2025.
Developments in the Middle East may continue to drive trading next week, although investors are also likely to keep an eye on the Federal Reserve's latest monetary policy decision.
With the Fed widely expected to leave interest rates unchanged, traders are likely to focus on central bank officials' latest projections for rates and the economy.
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