After moving to the downside early in the session, treasuries showed a notable turnaround over the course of the trading day on Friday.
Bond prices climbed well off their lows of the session and into positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.9 basis points to 3.687 percent after reaching a high of 3.756 percent.
Treasuries moved higher for the third consecutive session due in part to optimism about slower interest rate hikes.
The minutes of the latest Federal Reserve meeting, released on Wednesday, provided further evidence the central bank is considering slowing the pace of its rate hikes as soon as next month.
The minutes said a “substantial majority” of meeting participants judged that a slowing in the pace of rate hikes would likely “soon be appropriate.”
A slower pace of rate hikes would better allow the Fed to assess progress toward its goals of maximum employment and price stability, the minutes said.
At the same time, the Fed also said some participants felt the central bank will need to raise rates higher than previously expected in order to attain a sufficiently restrictive stance to bring inflation down.
Trading activity was somewhat subdued, however, with some traders staying away from their desks following the Thanksgiving Day holiday on Thursday.
The Labor Department’s closely watched monthly jobs report is likely to be in focus next week, while traders are also likely to keep an eye on reports on consumer confidence, personal income and spending and manufacturing activity.
A speech by Federal Reserve Chair Jerome Powell is also likely to attract attention along with the Fed’s Beige Book, as traders look for further clues about the outlook for interest rates.
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