By Joseph Adinolfi, MarketWatch

Investors wait to hear from two Fed officials

Treasury yields followed Japanese and European rates lower on Friday, putting them on track for their largest weekly decline since mid-August.

The yield on the 10-year note fell 2.3 basis points to 1.734%. On Thursday, it touched its lowest intraday level in a week and a half as European Central Bank President Mario Draghi left the door open for an extension of the central bank's massive bond-buying program at the bank's December meeting.

Investors avoided short-term Treasurys following comments from New York Fed President William Dudley, who said late Wednesday that he expects the central bank will raise interest rates later this year. Short-term Treasury yields are the most sensitive to Fed rate hike expectations. The two-year yield was flat at 0.823%. Yields move inversely to prices.

Since the beginning of October, Treasury yields have moved moderately higher as the outlook for inflation has improved, said Dan Heckman, senior fixed-income strategist at U.S. Bank, driven in part by rising oil prices.

"Worries about inflation is the biggest factor in rates and where they're headed," Heckman said.

But while the outlook for inflation has improved, data released earlier this week show U.S. core inflation rose just 0.1% in October, shy of economists' expectations. This, along with comments from Draghi, has helped weigh on yields this week.

The yield on the 30-year Treasury , known as the long bond, rose 2.5 basis points to 2.482%.

Elsewhere, the yield on the German 10-year bund was down half a basis point at minus 0.020%.In Japan, the yield on the 10-year Japanese government bond fell 1.5 basis point to minus 0.058%.

No important economic data were expected Friday, but Daniel Tarullo, a member of the Fed's board of governors, and John Williams, president of the San Francisco Fed, were scheduled to deliver public comments.

(END) Dow Jones Newswires

October 21, 2016 09:49 ET (13:49 GMT)