Government bonds weakened Friday, continuing a spate of selling that has prevailed and sent yields higher in the first few weeks of the year.
The yield on the benchmark 10-year Treasury note rose to 2.639% on Friday, its highest closing level since July 2014, from 2.611% on Thursday. Yields rise as bond prices fall.
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Government-bond yields have risen for three consecutive weeks -- after being stuck in a small range for much of 2017 -- as investors' confidence in the economy and the prospect of rising interest rates has spurred selling in Treasurys.
"We've had a really big run in the past two weeks," said Tracy Monroe Nolte, vice president of portfolio analysis at Advisors Asset Management. "There's an expression of concern somewhere in the market about inflation."
Inflation is a primary threat to the value of government bonds because it erodes the purchasing power of their fixed payments.
The 10-year yield rose to as high as 2.644% in early trading Friday, according to Tradeweb, before paring gains after the University of Michigan said that a measure of U.S. consumer sentiment slumped in January for the third straight month.
Government bonds have slipped in recent days even as U.S. lawmakers remained on the brink of a potential government shutdown. The House passed a one-month spending bill on Thursday night, but the plan's fate remained uncertain throughout trading on Friday, ahead of the deadline for a shutdown.
Some investors said they weren't overly concerned about the prospect of a shutdown.
"We'll probably see some additional volatility" in the bond market, said Mr. Nolte. But, he added, "these things tend to work out last minute."
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
January 19, 2018 16:44 ET (21:44 GMT)