bond yields were little changed ahead of crucial inflation reports due in the next few trading sessions bond trading early on friday was muted ahead of producer inflation data ppi set for release at 830 am eastern and as investors looked ahead to consumer price numbers due next tuesday 10year treasury yields sit just a few basis points above threemonth lows since hitting a cycle high around 425 this autumn the benchmark has retreated by threequarters of a percentage point on hopes a deteriorating economy will continue to push down consumer inflation that in june touched a 40year peak of 91 and in october was down to 77 bond bulls will hope to see inflationary pressures continuing to ease in the goods pipeline and indeed economists reckon the yearoveryear ppi will dip from 8 in october to 72 last month markets are pricing in a 747 probability that the fed will raise interest rates by another 50 basis points to a range of 425 to 450 after its meeting on dec 14 according to the cme fedwatch tool the central bank is expected to take its fed funds rate target to 492 by june 2023 according to 30day fed funds futures other economic data due for release on friday include the university of michigan sentiment index and 5year inflation expectations for december alongside wholesale inventories for october at 10 am third quarter real household wealth and real domestic debt growth will be published at noon all times eastern what are analysts saying “attention today will turn to another couple of data points that may give a steer on how aggressively the fed will lift rates over the coming months usually the producer price release gets less market attention compared with consumer prices but in part that’s because the cpi number is normally out first this month however ppi is out first so should offer a signal on inflation in november ahead of the allimportant cpi release on tuesday” said henry allen strategist at deutsche bank “the second data point will be the preliminary reading on the university of michigan’s consumer sentiment index for december that fell back in november after having risen for the 4 previous months so the question will be whether that was just a blip or the start of a more pronounced downturn” allen added “we’ll also get their measure of longerterm inflation expectations that is closely watched that’s begun to tick back up over the last couple of months so any further rises would be concerning from the fed’s point of view who thus far have been reassured by the fact that longerterm expectations have remained anchored” allen concluded