The Fed's preferred inflation gauge meets expectations, but bond markets react with a selloff sending Treasury yields higher. The January 12-month PCE price index is 2.5%, slightly cooler than December's 2.

Treasury yields were little changed Friday morning, as investors assessed a reading on U.S. inflation that was in line with Wall Street’s expectations. The yield on the 10-year Treasury note was down about 1 basis points at around 4.

ET, the benchmark 10-year yield Treasury yield fell by about 3 basis points to 4.252%. The 2-year Treasury yield was down by 3 basis points at 4.05%. One b

The rally in U.S. Treasurys is expected to reverse after Tuesday's fall in yields, said Capital Economics' Joe Maher in a note. While souring risk sentiment pushed Treasury yields to levels unseen since mid-December,