On a Thursday morning, investors kept a close eye on Treasury yields, which were hovering near the unchanged mark as they considered the latest figures on weekly jobless claims. Specifically, the yield on the 10-year Treasury was stable at 4.581%. This came after it had briefly surged 5 basis points past the 4.6% threshold. Meanwhile, the 2-year Treasury saw a slight dip, trading 1 basis point lower at 4.329%. Just so it’s clear, a basis point is a tenth of a percentage, and there’s an inverse relationship between yields and prices.
The Labor Department’s report on Thursday revealed that new jobless claims totaled 219,000 for the week ending December 21, landing just a hair below the previous week by 1,000. This was also less than the 225,000 that economists polled by Dow Jones had anticipated. However, the picture wasn’t entirely rosy as ongoing jobless claims, which are tracked with a week’s delay, rose to 1.91 million. This represents an increase of 46,000 and is the highest level we’ve seen since November 13, 2021.
The yield on the 10-year Treasury has climbed more than 40 basis points throughout this month. The significant rise largely followed the Federal Reserve’s decision to reduce its forecast for rate cuts. Now, only two reductions are expected in 2025, a shift from the four that seemed likely back in September.
