US Treasury yields increased on Friday as investors weighed the economic outlook for 2024. The 10-year Treasury yield rose by over 2 basis points to 4.6%, while the 2-year Treasury gained 3 basis points to trade at 4.281%. Both yields were down for the week.
The rise in yields comes as investors consider the manufacturing sector’s performance, which showed a decline in December’s ISM manufacturing PMI report. The reading of 49.3 is above expectations but below the level of 50 that signifies expansion.
Experts predict a broader weakening in hiring activity and expect next week’s payroll report to show sub-200k gains. However, initial jobless claims data for the week ending Dec. 28 showed a decline, coming in at 211,000, below economists’ expectations of 225,000.
The Treasury market has been volatile this year, with the 10-year yield starting at 3.9% and ending at 4.5%. The Federal Reserve’s interest rate cuts have also been impacted by economic concerns, and investors will be watching policy decisions in January.
The Fed funds futures market suggests a pause in monetary policy meetings, according to the CME FedWatch Tool. As bond markets remain closed for New Year’s Day, traders will closely monitor the situation.
Source: https://www.cnbc.com/2025/01/03/us-treasury-yields-investors-weigh-economic-outlook-for-2025.html