Bond Market Commentary

Over in bond land, Treasury yields are mostly lower before the opening bell Friday as investors await today’s economic releases, including the Personal Consumption Expenditures (PCE) Deflator and finalized consumer sentiment data from the University of Michigan. As of 6:49 AM ET, the yield on the 10-year note is decreasing three basis points (0.03%) to 4.33%, while the 30-year bond yield is falling four basis points (0.04%) to 4.68%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is unchanged at 3.99%.

Treasury yields were mixed on Thursday as investors digested the latest updates on tariff policy. The final reading of fourth-quarter gross domestic product was revised slightly higher, while inflation measures were revised slightly lower. The yield on the 10-year note was up one basis point (0.01%) to 4.36%, while the 30-year bond yield rose two basis points (0.02%) to 4.72%. The yield on the two-year note decreased three basis points (0.03%) to 3.99%.

On the data front, personal income is expected to have increased 0.4% month-over-month (MOM) in February, slower than the prior month’s 0.9%, while personal spending is expected to have increased 0.5% MOM in February compared to the prior month’s decline of 0.2%. The PCE deflator for February is expected to have risen 0.3% MOM and 2.5% year-over-year (YOY), both similar to the prior month’s changes. Meanwhile, the core PCE deflator for February is expected to have increased 0.3% MOM, similar to the prior month’s change, but accelerated to 2.7% YOY from the prior month’s 2.6%. The finalized March reading of consumer sentiment from the University of Michigan is expected to come in at 57.9, while one-year and 5-10-year inflation expectations are projected to come in at 4.9% and 3.9%, unchanged from the prior readings. The Federal Reserve (Fed) Bank of Kansas City will release their services activity survey.

In the central bank space, Fed Governor Michael Barr and Atlanta Fed President Raphael Bostic are scheduled to speak today.

Mortgage rates were mixed in the latest week. For the week ending March 27, the average 30-year fixed mortgage rate was down two basis points (0.02%) to 6.65%, versus 6.79% a year ago. The 15-year fixed mortgage rate increased six basis points (0.06%) to 5.89%, versus 6.11% a year ago.

The Bloomberg 30-day visible supply rose $1.134 billion to $11.938 billion on Thursday, compared to the 12-month average of $12.342 billion.

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