The 10-year Treasury yield surged to its highest level since May on Friday, reaching 4.626% and surpassing its previous peak of 4.641%. This marks a seven-month high for the benchmark rate. The yield rose 4 basis points from Thursday’s close, while the 2-year Treasury lagged behind at 4.318%.
One basis point is equivalent to 0.01%, indicating that the recent price decline would translate to a percentage gain of 40 basis points. Treasury yields tend to move in opposition to prices.
Meanwhile, jobless claims data for the week ending December 21 revealed a decrease of 1,000 from the previous week’s total, with 219,000 individuals filing for unemployment benefits below consensus expectations of 225,000. However, continuing claims rose by 46,000 to their highest level since November 2021.
Market traders are now expecting a more hawkish Federal Reserve in 2025 and anticipate interest rate hikes following the central bank’s meeting at the end of January, when a rate hold is expected. This increase in market expectations has driven up the 10-year Treasury yield by over 40 basis points so far this month.
Source: https://www.cnbc.com/2024/12/27/10-year-treasury-yield-27-december-2024.html