NEW YORK (CNNMoney.com) - Bond prices remained largely unchanged Friday following a four-day decline as inflation fears were soothed by a consumer spending report.

The dollar gained against the euro and yen.

The 10-year Treasury note rose two ticks to 97-08/32, leaving its yield little changed at 4.85 percent. The benchmark yield had hit a 22-month intraday high of 4.88 percent Wednesday, the highest since May 14, 2004.

The 30-year bond was also flat at 93-26/32 to yield 4.89 percent, unchanged from the previous session. Bond prices and yields move in opposite directions.

The five-year note rose two ticks to yield 4.81 percent. The two-year note climbed 1/32 to yield 4.82 percent.

Treasury prices gained after the Commerce Department delivered its February personal spending, income report, which slowed from the previous month but still beat expectations.

But investors were particularly focused on the core personal consumption expenditures, or PCE, which climbed 0.1 percent, meeting expectations, but lower than a 0.2 percent gain during the month of January.

The core figure, which is the price index for consumer spending with energy and food costs stripped out, is considered the Federal Reserve's favorite inflationary measuring stick.

The year-over-year reading held steady at 1.8 percent, considered by some market observers to fall within the Fed's inflationary comfort level.

Bond traders fear inflation since it erodes the value of the fixed-income investment.

Investors are now wondering if the Federal Reserve will continue to raise short-term rates. The central bank hiked its key fed funds rate target Tuesday to 4.75 percent. (Full story.)

The 15th straight rate increase since June 2004 was widely expected, and the Fed said that it may have to raise rates further to ward off inflation. (Full story.)

Many investors are anticipating another increase when Fed officials meet in May, and the core PCE figure could fuel those expectations.

Investors still have plenty of data to digest during Friday's session, as February factory orders and the University of Michigan's consumer sentiment index are slated for release.

In currency trading, the dollar gained. The euro bought $1.2114, down from $1.2155 late Thursday, while the dollar bought ¥117.63, up from ¥117.34 the previous session.

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