NEW YORK (CNNMoney.com) - Bond prices fell Friday marking a three-day losing streak as investors locked in prospects for another interest rate hike which would bring the fed funds rate to 5.25 percent.

The dollar was mixed against the euro and the yen.

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The 10-year note lost 7/32 to 99-31/32, yielding 5.12 percent, up from 5.10 percent late Thursday. The benchmark yield continued to remain below the yield on the two-year note, resulting in an inverted yield curve.

Yield curve inversions in the past have been considered possible signs of impending recessions, but that is considered less reliable since the curve has inverted on and off over the past 11 months. Many economists now say an inversion is more a harbinger of slowing economic growth.

The 30-year bond declined 16/32 to 89-27/32, to yield 5.17 percent, up from 5.14 percent the previous session. Bond prices and yields move in opposite directions.

The five-year note fell 3/32, yielding 5.09 percent, while the two-year note was down one tick, yielding 5.16 percent.

Treasurys sank Wednesday after a consumer inflation report cemented expectations for the Federal Reserve to hike rate when it meets June 28-29. Those losses were extended Thursday as investors pulled out of their safe-haven investments to join in a stock market rally.

Friday morning, the University of Michigan's preliminary early June index of consumer sentiment rose unexpectedly in early June, said sources who saw the subscription-only report.

Investors also took in a report that showed the current account deficit narrowed to $208.7 billion in the first quarter from a revised $223.1 billion in the fourth quarter.

The reports cemented expectations for an increase in the benchmark overnight federal funds rate to 5.25 percent at the end of June.

Housing starts and durable goods orders for May are on deck for next week.

In currency trading, the euro bought $1.2646, up from $1.2613 late Thursday. The dollar traded at ¥115.15, up from ¥114.92 the previous session.

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