Yield on benchmark 10-year note slips to 2.74 percent as consumer prices rise

Signs of weak spending push Treasurys up

NEW YORK — A pair of weak readings on the economy sent investors into the safety of Treasurys on Friday.

The Labor Department reported consumer prices rose 0.3 percent in August. Excluding food and energy, the rate was flat. This core rate has only gained 0.9 percent in the past year, the lowest figure in 44 years. Another report from the Thomson Reuters/University of Michigan poll showed consumer confidence slipping this month.

With little sign of inflation, investors were free to step into low-yielding Treasurys. The benchmark 10-year note rose 12.5 cents to $98.93. That lowered the yield to 2.74 percent from 2.72 percent late Thursday. Bond prices and yields move in the opposite direction. The 10-year yield is a widely used to set rates for corporate borrowing and mortgages.

The Treasury market found support this week from talk among traders that the Federal Reserve could launch a new effort to lower long-term interest rates through buying more Treasurys. The next meeting of the Federal Reserve’s interest-rate setting committee comes Tuesday.

In other trading, the 30-year bond gained 37.5 cents to $99.46, with a 3.90 percent yield. The 2-year note traded flat at $99.81, yielding 0.47 percent.

The yield on the three-month bill was 0.14 percent, with a discount of 0.15 percent.