Treasurys
The U.S. 10-year Treasury yield slipped on Friday as investors assessed a strike by Israel against Iran, while also considering the latest economic data and remarks from Federal Reserve officials.
The yield on the 10-year Treasury fell more than 2 basis points to 4.623%. The 2-year Treasury yield was last at 4.986%, retreating by less than 1 basis point.
Yields and prices move in opposite directions. One basis point is equivalent to 0.01%.
A person familiar with the matter told NBC News that Israel conducted a limited strike against Iran. Earlier, Iran's Fars news agency reported explosions were heard near the airport at the country's central Isfahan city, but the reason was unknown.
"The worst place to be as a bondholder is the uncertain middle," Thierry Wizman, global foreign exchange and rates strategist at Macquarie, wrote in a note to clients. "That's where the threat of a wider war - with super-power involvement - lingers, and oil prices stay elevated, and the Fed stays guarded against that risk of supply-side disruptions and inflation."
"That situation is not grave enough to cause a flight-to-safety to bonds, nor disinflationary enough to want to own bonds," he added. "That's where we are now, and its not good for bonds."
Investors also digested the latest economic data and remarks from policymakers as they considered the outlook for interest rates. Fed officials have in recent days and weeks indicated that interest rates may remain elevated for longer than previously anticipated.
"I definitely don't feel urgency to cut interest rates," New York Fed President John Williams said on Thursday, adding that this position was linked to strength in the economy. Interest rates would eventually need to be cut, but that would depend on how the economy develops, he said at Semafor's World Economy Summit.
Elsewhere, Atlanta Fed President Raphael Bostic said rate cuts may not come until the end of the year, and that he was "comfortable being patient," while Minneapolis Fed President Neel Kashkari suggested rate cuts may not begin until 2025. The comments echo those of other Fed policymakers, including Chairman Jerome Powell.