Treasury Action: yields have drifted higher from the day's lows
Treasury Action: yields have drifted higher from the day's lows as trading thins into the weekend. Yields dropped after the data disappointments as the languid inflation and sales numbers are expected to keep the FOMC on a very cautious normalization path over the rest of the year and into 2018. Implied rates are now suggesting only about a 45% risk for a rate hike by year end. However, comments from the FOMC voter Kaplan, who said he still favors starting the balance sheet unwind, perhaps as soon as September, capped the rally. Some rate locking ahead of what's expected to be a heavy corporate issuance calendar next week, as many companies will have emerged from their blackout periods, weighed too. Rates in Europe also moved up off their lows on profit taking and rate locking.