MARKET UPDATE
Yields Higher After FOMC Rate Cut
12.19.2024
This morning equity markets are higher and Treasury yields steepened sharply with the 10-year yield trading near 4.60%. The latest CPI data came in at 3.4%, just above expectations, and still stubbornly above the Fed's 2% target. On the other hand, jobs and unemployment data has been weaker recently. At the December FOMC meeting, they lowered the target rate by 25 bps, which was in line with market expectations. Looking ahead, expectations are for additional cuts coming in 2025. Beginning in early 2022, the Fed rapidly tightened monetary policy, with the cumulative amount of hikes at 5.25% through July 2023. Only in September 2024 did the Fed begin to cut following this rapid rise. The December 2024 forecast materials suggest that the target rate will gradually move lower through 2025. The Fed will continue to observe the economic data and act to maintain their dual mandate of 2% inflation and full employment. At this point in the rate cycle, the economic data continues to be encouraging and a "soft landing" for the economy following 35 year highs in inflation appears on track.
- CMS Staff
TREASURY YIELDS
Term
3 Month
6 Month
2 Year
5 Year
10 Year
30 Year
Current
4.33%
4.29%
4.32%
4.43%
4.58%
4.76%
Last Month
4.52%
4.46%
4.29%
4.26%
4.39%
4.58%
BENCHMARKS
PRIME:
DJIA:
Crude Oil (WTI):
YEN:
Gold:
1 Year CMT:
1 Month T-Bill:
Fed Funds Effective:
Next FOMC Meeting:
7.50%
42,546.9
$70.02
157.7000
$2,594.50
4.26%
4.306%
4.33%
Jan 28-29, 2025
​
Source: Bloomberg