The 10-year Treasury yields in the U.S. experienced a rise on Thursday as investors carefully assessed economic indicators for insights into the economy’s status and contemplated potential changes in interest rates.
As of 6:10 a.m. ET, the yield on the 10-year Treasury increased by 4 basis points to reach 3.955%. Notably, it briefly surpassed the 4% threshold on the preceding day. Simultaneously, the 2-year Treasury yield climbed by 2 basis points, reaching 4.337%.
The relationship between yields and prices, wherein they move inversely, remained consistent, with one basis point representing a 0.01% shift.
Investor deliberations revolved around the Federal Reserve’s intentions regarding interest rate adjustments, specifically concerning the timing and magnitude of potential rate cuts.
In their recent December meeting, the central bank disclosed its anticipation of executing three rate reductions in 2024. However, market participants are anticipating more aggressive rate adjustments, with expectations of an imminent initial cut.
The release of minutes from the Fed’s December meeting on Wednesday unveiled uncertainties among policymakers regarding the future trajectory of interest rates, despite an underlying belief in the likelihood of rate reductions.
Acknowledging the significance of a cautious, data-driven approach in shaping monetary policy decisions, Fed officials highlighted the continued necessity for a restrictive policy stance until inflation achieves sustainability within the central bank’s target range.
Concurrently, insights into the labor market’s condition emerged through JOLTS job openings data, indicating 8.79 million job listings in November, aligning with forecasts.
Further elucidation regarding the labor market’s status is anticipated through ADP’s private payrolls report on Thursday. Economists, according to a Dow Jones survey, anticipate a rise of 130,000 in December’s payrolls, signaling an uptick from the previous month.