Treasuries Move Back To The Upside Ahead Of Next Week's Fed Meeting

(RTTNews) - Treasuries moved moderately higher during trading on Friday, rebounding following the pullback seen over the two previous sessions.

Bond prices gave back ground after an early advance but moved back to the upside as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 3.0 basis points to 3.650 percent.

The rebound by treasuries came amid optimism about the outlook for interest rates ahead of the Federal Reserve's monetary policy meeting next week.

The Fed is scheduled to announce its latest monetary policy decision next Wednesday and is almost universally expected to lower interest rates by at least 25 basis points.

Treasuries gave back ground after the University of Michigan released a report showing consumer sentiment in the U.S. has improved by more than anticipated in the month of September.

The University of Michigan said its consumer sentiment index rose to 69.0 in September from 67.9 in August, while economists had expected the index to inch up to 68.0.

However, bond prices recovered as traders digested the details of the report, which also showed year-ahead inflation expectations fell for the fourth consecutive month.

Year-ahead inflation expectations edged down to 2.7 percent in September from 2.8 percent in August, hitting the lowest level since December 2020.

The Labor Department also released a report early in the day showing import prices in the U.S. decreased by slightly more than expected in the month of August.

While the Fed's monetary policy announcement is likely to be in the spotlight next week, reports on retail sales and industrial production may also attract attention.