By Daniel Kruger 

U.S. government bond prices rose Friday as investors assessed how recent volatility in markets from stocks to oil is affecting the economy and Federal Reserve policy.

The yield on the benchmark 10-year Treasury note fell to 3.088%, according to Tradeweb, from 3.116% Thursday, retreating further from a seven-year high of 3.232% hit Nov. 8

Yields, which fall when bond prices rise, declined after Fed Vice Chairman Richard Clarida on Friday emphasized the importance of relying on economic data to inform central bank policy as interest rates approach their so-called neutral rate.

Some analysts said recent commentary from central bank officials suggested they were unlikely to surprise investors with a faster pace of interest-rate increases. On Wednesday Fed Chairman Jerome Powell said policy makers are monitoring the slowdown in global growth for signs that it could affect growth in the U.S. He also noted that recent declines in stocks could weigh on the economy by contributing to tighter financial conditions.

Demand for U.S. government bonds has been supported by falling share prices, as questions have emerged about the durability of the bull market in stocks, and as the performance of some well-known companies has come under closer scrutiny.

"You've had a couple of Fed officials come out and say there's weakness in the global economy and that may spread to the U.S.," said Dan Heckman, senior fixed-income strategist at U.S. Bank Wealth Management.

Bonds have also been underpinned by concerns about recent volatility in stocks and the pace of growth in China. Investors are also watching turmoil in the U.K. surrounding Brexit talks with the European Union, where British Prime Minister Theresa May could face a no-confidence vote as some of her cabinet officials remain skeptical about a proposed separation agreement.

Write to Daniel Kruger at Daniel.Kruger@wsj.com

 

(END) Dow Jones Newswires

November 16, 2018 12:31 ET (17:31 GMT)

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