By Sam Goldfarb
U.S. government-bond prices fell Friday, briefly pushing the yield on the 10-year note above 3% for the first time since early August, as investors' appetite for Treasurys was once again tested by forecasts for higher interest rates and continued strength in the U.S. economy.
In recent trading, the yield on the benchmark 10-year Treasury note was 2.990%, according to Tradeweb, compared with 2.964% Thursday. The yield reached as high as 3.001% early in the U.S. trading session.
Yields, which rise as bond prices fall, have climbed steadily in recent weeks, as factors that have constrained their rise -- including concerns about trade tensions and emerging-market economies -- have receded somewhat. At the same time, forces pushing them higher, such as solid U.S. economic data, have remained in place.
The 10-year yield's move to 3% will bring increased scrutiny to the bond market, with investors watching to see whether the yield can break through a level that has previously acted as a ceiling this year.
Treasury yields generally, and the 10-year yield in particular, are of great importance to the global economy, serving as benchmarks for a range of interest rates used by consumers, businesses and governments.
The 10-year Treasury yield has moved above 3% on a few occasions this year, only to quickly fall back down again, ensuring that the credit environment for consumers and businesses remains relatively favorable, even as the Federal Reserve has steadily raised short-term interest rates.
Friday's rise in yields reflects the "near-term pressure that we have seen on Treasurys," said John Canavan, market analyst at Stone and McCarthy Research Associates.
If the 10-year yield can't move higher than 3% on Friday, it will likely settle back into its summer trading range, while the yield could test its 2018 highs if it can break through that threshold, he added.
Investors sold Treasurys Friday despite a lackluster report on retail sales.
Sales at retail stores and restaurants rose 0.1% from the prior month to a seasonally adjusted $509 billion in August, the Commerce Department said Friday. That was well below the 0.4% increase economists surveyed by The Wall Street Journal had expected.
Still, revised data showed retail sales rose 0.7% in July, up from an initially reported 0.5% increase.
Write to Sam Goldfarb at firstname.lastname@example.org
(END) Dow Jones Newswires
September 14, 2018 11:49 ET (15:49 GMT)
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