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US Treasury yields rose on Monday in one of the final trading days of the year.
The performance on the Treasury to 10 years was down about 7 basis points to 4.547%, trading just below multi-month highs recorded last week. U 2 year treasure the yield was last traded at 4.254% after diving by about 7 basis points.
Yields and prices move in opposite directions, and a basis point is equal to 0.01%.
Investors focused on the end of the year and the quarter, and considered the outlook for the US economy and the path to monetary policy from the Federal Reserve in 2025.
The Fed indicated that fewer interest rate cuts were on the horizon when they met earlier this month. Policymakers will make their first 2025 tariff decision at the end of January. Long-term interest rates have risen in recent months, despite the Fed’s cuts, as traders hammered expectations for more central bank action next year.
“We believe the Fed’s rate cut cycle is nearing its end, as we expect only one additional rate cut next year. Fed and market expectations were for a rate cut cycle of longer and deeper rates, but our projects have seen fewer rate cuts as economic strength and stubborn inflation persist,” Brian Rehling, head of global income strategy fixed at Wells Fargo Investment Institute, it said in a note to clients on Monday.
Economic data released on Monday was mixed. Pending November home sales data rose to the highest level in a year, but the Chicago purchasing managers’ index came in at 36.9, below the 42.2 projected by economists, according to Dow Jones.
Data released last week showed that initial weekly jobless claims for the week ending December 21 fell slightly and came in below expectations, while continued claims for the week ending December 14 jumped to a record high level from November 2021.
Bond markets will close on Tuesday first and remain closed on Wednesday, as New Year’s Eve and New Year’s Day are observed.
