By Gunjan Banerji 

Government bond prices sank Friday but capped off a second week of gains.

The yield on the 10-year Treasury note inched higher to 2.902% Friday, from 2.899% on Thursday. Yields rise as bond prices fall.

Yields rose with global stocks on Friday after a turbulent week, reducing demand for safer assets like Treasury bonds, which have swung on news from Federal Reserve Chairman Jerome Powell. Mr. Powell said falling unemployment and ramped up inflation could lead to additional interest-rate increases, driving the 10-year Treasury yield higher.

The 10-year yield rose as high as 2.928% in early trading Friday before paring gains, according to Tradeweb.

Bill Merz, head of fixed-income research for U.S. Bank Wealth Management, said it was noteworthy that yields have fallen since Mr. Powell's comments on Wednesday, finishing a second week of declines.

The 10-year yield has been down for four of the past five weeks.

Economic fundamentals and inflation data, which erode the purchasing power of government bonds' fixed payments, support higher interest rates, but declining yields indicate that investors are questioning these premises.

There has been a disconnect between what the data shows and what the bond market indicates investors are expecting, Mr. Merz said.

"There's a real tug of war going on," in the bond market, he added.

Additionally, the U.S. Treasury Department will sell more than $200 billion in debt next week, flooding the market with supply.

Write to Gunjan Banerji at Gunjan.Banerji@wsj.com

(END) Dow Jones Newswires

June 22, 2018 16:07 ET (20:07 GMT)