Treasuries Close Moderately Lower Ahead Of Next Week’s Fed Meeting

Treasuries saw considerable volatility in morning trading on Friday before spending the afternoon in negative territory.

Bond prices regained some ground going into the close but remained in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.3 basis points to 2.887 percent.

The lower close by treasuries may have reflected concerns about next week’s Federal Reserve meeting, with the Fed widely expected to raise interest rates by 50 basis points.

Traders are likely to pay close attention to the Fed’s accompanying statement for clues about aggressive the central bank plans to tighten monetary policy going forward.

On the U.S. economic front, a report released by the Commerce Department showed U.S. personal income increased by slightly more than expected in the month of March, while U.S. personal spending jumped by much more than anticipated.

The Commerce Department said personal income rose by 0.5 percent in March after climbing by an upwardly revised 0.7 percent in February.

Economists had expected personal income to rise by 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

The report also showed personal spending jumped by 1.1 percent in March after advancing by an upwardly revised 0.6 percent in February.

Personal spending was expected to increase by 0.7 percent compared to the 0.2 percent uptick originally reported for the previous month.

Meanwhile, a reading on inflation said to be preferred by the Fed showed the annual rate of core consumer price growth slowed to 5.2 percent in March from 5.3 percent in February.

While the Fed meeting is likely to be in the spotlight next week, traders are also likely to keep an eye on the monthly jobs report.

Reports on manufacturing and service sector activity, factory orders, the U.S. trade deficit and labor productivity may also attract some attention

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