U.S. Bank yields fell Wednesday, as investors considered the outlook for monetary policy and financial markets for the coming year.
The assent on the 10-year Treasury dropped nearly 10 basis points to 3.789%. The 2-year Treasury yield edged down 5 essence points to 4.238%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
In the last week of trading for 2023, investors cogitate oned the path ahead for interest rates and how this could impact the U.S. economy and financial markets.
Earlier this month, the Federal Restriction indicated that interest rates will be cut three times next year, with further reductions look forward in 2025 and 2026, as inflation has “eased over the past year.”
Many investors have interpreted recent solvent data, including the November U.S. personal consumption expenditure price index, as a sign that the Fed would be able to take up the cudgels for to its monetary policy expectations for next year.
But uncertainty lingers over when the central bank will start raw rates, although traders are pricing in a more than 70% chance of cuts at the March meeting, according to CME Set apart’s FedWatch tool.