U.S. Treasury yields climbed Tuesday as investors look ahead to potential rate cuts from the Federal Reserve.
Projections released by the Fed in December showed officials see the fed funds rate peaking at 4.6% in 2024, down from the central bank's previous September projection of 5.1%.
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Video Transcript
SEANA SMITH: All right. Well, let's go to Josh Schafer standing by at the Interactive on the Treasury market. And Josh, we're taking a look at yields here pushing to the upside.
JOSH SCHAFER: Yeah. Yields pressing up a little bit to start our first day of 2024 trading here. So you can see that's the 10-year yield up about 10 basis points, and then when you flick over to the 30-year yield up about 9 basis points. But I want to go back to the 10-year and just talk about that number a little bit there. You're seeing 3.97% on your screen.
One thing that I found interesting just thinking about where we're at with the 10-year Treasury and rate strategists have been flagging this. We're already basically where a lot of rate strategists thought we would be to end 2024. And it is, of course, the first day of trading in '24. So when you take a look at the 10-year and the moves we saw over the last month, we really saw yields come down significantly.
And we've seen that really throughout a lot of the year in the second half of the month. So remember, we had that big push up in October in the 10-year yield. Doesn't look like it's working for me right now. But I can pull up a little note from December that I found interesting. So this is your 10-year Treasury yield. It saw the biggest drop since 2008. So these big numbers here, that was 2008 where the 10-year Treasury yield dropped the most there you can see.
And then you can see really in 2023, we had that big drop in December. So that's something we're watching headed into the start of the year was in the same way that we saw stocks really shoot up in December, we saw yields fall. Remember, we've been following that for a while. Today we're seeing yields up, stocks down. But just with how far yields fell in December, how much further do we really have to go to start the year I think is one of the big questions.
And then, of course, in a week, where we are going to talk a lot about economic data and talk a lot about jobs, we'll have to see how yields are reacting to that. Is bad news still good news? How do-- how do yields move in reaction to that economic data is certainly going to be something we're watching this week?