WASHINGTON (dpa-AFX) - Following the moderate rebound seen in the previous session, treasuries showed a substantial move back to the downside during trading on Friday.
Bond prices plummeted early in the session and saw continued weakness throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, soared 13.4 basis points to 4.595 percent.
The ten-year yield more than offset the 2.0 basis point dip seen on Thursday, skyrocketing to its highest closing level in almost a year.
The nosedive by treasuries came as traders digested recent data showing substantial accelerations in the annual rates of consumer and producer price growth in the month of April.
Reports released over the past few days showed consumer price growth surged to its highest level since May 2023 and producer price growth spiked to its highest level since December 2022.
While the sharply faster price growth largely reflected skyrocketing energy prices due to the U.S. war with Iran, the data has led to concerns about the outlook for interest rates.
CME Group's FedWatch Tool is currently indicating a 38.8 percent chance rates will be a quarter point higher following the Federal Reserve's last meeting of the year, up from just 13.7 percent a week ago.
A sharp increase by the price of crude oil also weighed on treasuries, with U.S. crude oil futures soaring by more than 4 percent.
The jump in oil prices comes as the summit between President Donald Trump and his Chinese counterpart Xi Jinping produced warm words but yielded little progress on the U.S.-Iran war.
In U.S. economic news, the Federal Reserve released a report showing industrial production in the U.S. rebounded by much more than anticipated in the month of April.
The report said industrial production climbed by 0.7 percent in April after falling by a revised 0.3 percent in March.
Economists had expected industrial production to rise by 0.3 percent compared to the 0.5 percent decrease originally reported for the previous month.
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