NEW YORK (CNNMoney.com) - Bonds were mixed in thin trade Friday after a key measure of inflation rose in line with forecasts.

The benchmark 10-year note slipped 1/32 to 100-12/32 to yield 5.07 percent, relatively unchanged from Thursday.

The 30-year bond added 7/32 to 90-2/32, yielding 5.15 percent, down from 5.17 the previous session. Bond prices and yields move in opposite directions.

The five-year note fell 6/32 to yield 4.98 percent, while the two-year note was flat yielding 4.95 percent.

Bonds were higher earlier in the session after the Commerce Department's report on personal income and spending showed that the prices paid by consumers on items other than food and energy, known as the core PCE deflator, was up 2.1 percent over the 12-month period ending in April.

While that was roughly in-line with estimates, it calmed a market that was bracing for a possibly much higher number in light of several inflation reports last week that were higher than expected.

The data on core PCE should ease some of the pressure on the Fed to earn inflation credibility by raising rates, Brian Fabri, chief economist at BNP Paribas, told Reuters. "Pause is probably their best and most likely strategy."

Inflation hurts bonds as it erodes the value of the fixed-interest paying investment.

Treasurys also got a boost after the Michigan Consumer Sentiment report said confidence slipped in May, which could also ease inflationary pressure if American's decide to keep more of their money in their pockets.

In currency trading, the dollar rose against the euro and yen.

The euro bought $1.2734, down from $1.2795 late in New York Thursday. The dollar bought ¥112.64, up from ¥111.78 the previous session.

Most analysts tied the dollar's strength to choppy trade amid thin conditions heading into holiday weekends in the U.S. and United Kingdom, Reuters reported.

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