Treasuries fluctuated over the course of the trading session on Friday before eventually ending the day modestly lower.
Bond prices bounced back and forth across the unchanged line in morning trading but settled in negative territory in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inch up by 1.3 basis points to 1.567 percent.
The choppy trading on the day extended the lackluster performance seen in the previous session as traders digested reports President Joe Biden’s plans to raise capital gains tax rates.
According to media outlets including Bloomberg News and the New York Times, Biden’s so-called “American Families Plan” would raise the capital gains rate for those earning $1 million or more to 39.6 percent from 20 percent.
In U.S. economic news, the Commerce Department released a report showing a substantial rebound in new home sales in the month of March.
The report showed new home sales skyrocketed by 20.7 percent to an annual rate of 1.021 million in March after plunging by 16.2 percent to a revised rate of 846,000 in February.
Economists had expected new home sales to spike by 14.3 percent to a rate of 886,000 from the 775,000 originally reported for the previous month.
With the rebound, new home sales soared from the eight-month low set in February to their highest level since August of 2006.
The Federal Reserve’s monetary policy announcement is likely to be in the spotlight next week, although the central bank is widely expected to maintain its ultra-easy monetary policy.
Traders are likely to pay close attention to any changes to the Fed’s statement that may signal a shift in policy in the near future.
Reports on durable goods orders, consumer confidence and personal income and spending may also attract attention along with the preliminary reading on first quarter GDP.
Bond traders are also likely to keep an eye on the results of the Treasury Department’s auctions of two-year, five-year and seven -year notes.
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