Yields Hover as Investors React to Economic Signals
The 10-year Treasury yield reached 4.687% on Wednesday, nearing its highest level since late April after briefly crossing 4.7% earlier in the session. This movement reflects investor reactions to strong economic data, suggesting the Federal Reserve will adopt a cautious approach in its rate cut strategy for 2025.
The 30-year Treasury yield rose three basis points to 4.943%, its highest level since November 2023, while the 2-year Treasury yield fell slightly by more than two basis points to 4.277%.
Key Treasury Yield Movements
- 10-Year Treasury Yield: 4.687%, down less than one basis point.
- 2-Year Treasury Yield: 4.277%, down more than two basis points.
- 30-Year Treasury Yield: 4.943%, up three basis points.
Yields and prices move inversely, and one basis point equals 0.01%.
Data Supporting Treasury Yield Trends
Economic data released Wednesday by ADP showed weaker-than-expected private sector job creation for December, along with the slowest wage growth since July 2021. These figures align with expectations of a cooling labor market but suggest inflationary pressures remain manageable.
Investors are now anticipating the Federal Reserve’s December meeting minutes, due at 2 p.m. ET, for further insights into the central bank’s rate cut outlook. The minutes may provide context for the Fed’s decision to reduce its key interest rate by 0.25% last month while signaling a cautious stance through its hawkish dot plot.
Broader Impacts on Bond Market
In the previous session, bond yields climbed following the release of the ISM services price index for December, which showed unexpectedly high job openings for November. These developments reinforce expectations of slower rate cuts and ongoing inflation concerns.
Treasury Yield Data Snapshot
| TICKER | COMPANY | YIELD | CHANGE |
|---|---|---|---|
| US1M | U.S. 1 Month Treasury | 4.299% | -0.011 |
| US3M | U.S. 3 Month Treasury | 4.314% | 0 |
| US6M | U.S. 6 Month Treasury | 4.274% | +0.003 |
| US1Y | U.S. 1 Year Treasury | 4.173% | -0.014 |
| US2Y | U.S. 2 Year Treasury | 4.279% | -0.016 |
| US10Y | U.S. 10 Year Treasury | 4.683% | -0.002 |
| US30Y | U.S. 30 Year Treasury | 4.919% | +0.007 |
With mixed economic signals, investors are closely monitoring the Federal Reserve’s meeting minutes for clarity on future monetary policy. Continued strength in economic data, such as job openings and wage growth, may influence the Fed’s cautious trajectory on interest rate adjustments throughout 2025.
