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Bond Report: Bond yields extend slide on U.S. economy fears


Bond yields fell on Friday, extending a decline on concerns the U.S. economy could tip into recession.

What’s happening

The yield on the 2-year Treasury note

fell 6 basis points to 3.04%. Yields move in the opposite direction to prices.

The yield on the 10-year Treasury note

also fell 6 basis points, to 2.82%.

The yield on the 30-year Treasury bond

fell 2 basis points to 3.02%.

What’s driving markets

Thursday provided ample fodder for those who say the U.S. economy is deteriorating.

Jobless claims rose to the highest level since November, the Philadelphia Fed manufacturing index unexpectedly fell deeper into negative territory, and the Conference Board said its leading economic index shows that a U.S. recession around the end of the year and early next is now likely.

The social-media company Snap

provided more bad news as it said a deteriorating economy will flatten sales in the third quarter.

The flash U.S. purchasing managers index is due for release at 9:45 a.m. Eastern. The eurozone composite PMI fell below the 50 neutral mark to a 17-month low.

Analysts at Bank of America, which last week lowered its end of the year 10-year yield forecast to 2.75% from 3.5%, said history shows to buy bonds when the Fed finishes hikes. Both the markets and the bank’s economists expect the last Fed hike to come in December.

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