PCE inflation data causes treasury yields to increase slightly.

On Friday, U.S. Treasury yields were slightly higher as investors anticipated the release of the latest personal consumption expenditures price index, which is the Federal Reserve's preferred inflation measure.

The 10-year Treasury yield increased by one basis point to 4.2980% at 3:15 a.m. ET, surpassing its previous high of 4.7244%.

Prices and yields move in opposite directions, with one basis point equal to 0.01%.

The latest inflation data is being closely watched by investors for clues about the economy's condition and the direction of monetary policy.

In May, the personal consumption expenditures price index is expected to remain unchanged from the previous month, while the annual increase is projected to be 2.6%. Core-PCE, which excludes food and energy prices, is expected to rise 0.1% on a monthly basis and 2.6% on an annual basis.

Consumer sentiment insights, personal income and spending data will be released on Friday.

Federal Reserve policymakers have indicated that they would only cut interest rates once inflation eases toward the 2% target, but uncertainty persists about what could come next.

According to CME Group's FedWatch tool, traders were last pricing in a 10% chance of rates being cut at the conclusion of the Fed's next meeting at the end of July, and a 64% likelihood of the first rate cut coming in September.

The possibility of multiple rate cuts this year remains uncertain, as Fed Governor Michelle Bowman earlier in the week indicated that she was open to a further rate increase if inflation continues to develop.