Investors were relieved to see Thursday that a much-anticipated report showed that a big rise in consumer-level inflation last month was mostly attributed to temporary factors. That could mean less pressure on the Federal Reserve to pull back on its measures supporting the economy. The Fed holds its next meeting on interest rate policy next week.
“You kind of have this notion that worries about inflation from the investor base might have peaked,” said Ross Mayfield, investment strategist at Baird.
A significant share of May’s rise in consumer prices was tied to the sale of used cars, which is largely attributed to purchases by rental car companies beefing up their fleets as people return to traveling.
Bond yields were mostly higher Friday, though the yield on the closely watched 10-year Treasury note was trading at 1.46%, down from 1.57% a week ago. Yields have been mostly headed lower this week despite reports showing more strength in the economy and possible signs of inflation.