The last trading week of 2024 begins

U.S. Treasury yields fell on Monday in one of the last trading days of the year.

Exit at st 10-year treasury fell about 8 basis points to 4.537%, trading slightly lower multi-month highs set last week. The 2-year Treasury the yield last traded at 4.25% after falling more than 7 basis points.

Yields and prices move in opposite directions, and one basis point equals 0.01%.

Even with Monday’s decline, the yield on the 10-year Treasury note still rose sharply in the fourth quarter, up from 3.8% in early October. The gains came as inflation and employment data remained solid in recent months, prompting investors to abandon expectations of a rate cut by the Federal Reserve.

The Fed has shown that less reduction in interest rates were on the horizon when they met earlier this month. Policymakers will make their first decision on rates in 2025 at the end of January. Long-term interest rates have risen in recent months despite Fed tapering as traders discount expectations for further central bank action next year.

“We believe the Fed’s rate cut cycle is coming to an end as we expect only one additional rate cut next year. Fed and market expectations were for a longer and deeper rate cut cycle, but our forecasts have consistently shown less rate cuts as an economic force and stubborn inflation persisting,” said Brian Relling, head of global fixed income strategy at Wells Fargo Investment Institute. in a note to clients on Monday.

Economic data released on Monday was mixed. Home sales data rose to the highest level in a year in November, but the Chicago Purchasing Managers’ Index came in at 36.9, below the 42.2 forecast by economists, according to Dow Jones.

The data was published last week showed that weekly initial jobless claims for the week ended Dec. 21 fell slightly and came in below expectations, while extended claims for the week ended Dec. 14 jumped to the highest level since November 2021.

Bond markets will close early on Tuesday and remain closed on Wednesday as New Year’s Day and New Year’s Day are celebrated.