U.S. Treasury yields climbed on Tuesday as 2024 trading kicked off and questions about the outlook for interest rates and the state of the economy remained.
The yield on the 10-year Treasury was up nearly 9 basis points at 3.946%. The 2-year Treasury yield was last 8 basis points higher at 4.328%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
Treasurys
The year 2023 marked a tumultuous year for bond markets, with the 10-year Treasury yield rising above 5% in October before ending the year below 3.9%.
The interest rate hikes, persistent inflation, recession fears and market shocks such as the regional banking crisis in the U.S. were among factors that shaped bond markets in 2023, and several of them will likely also have a significant effect in the year ahead.
Markets are widely expecting the Federal Reserve to have reached the end of its rate-hiking cycle, with the central bank having left rates unchanged at its last three meetings. Rate cuts are expected in 2024, with the Fed saying it was anticipating three cuts. When those cuts will take place remains unclear.
Even after these initial rate cuts, interest rates will remain higher, which has caused concerns about how this will affect the economy and whether the U.S. will dip into a recession this year.
No key data is expected on Tuesday. However, investors will gain fresh insights into the state of the labor market as the week continues with JOLTS job openings due Wednesday, followed by ADP's private payrolls report on Thursday and December's jobs report on Friday.
Don't miss these stories from CNBC PRO:
- These stocks will be the biggest S&P 500 winners of 2024, according to analysts
- Here's where to invest $50,000 in the new year, according to the pros
- Could a bitcoin ETF approval be a sell-the-news event? Here's what to expect if it happens
- These stocks will be the biggest Dow winners of 2024, according to analysts
- Oprah's flip on weight loss drugs is a sign of what's to come for the 'Ozempic trade' in 2024
Correction: A previous version of this story misstated the release dates for the JOLTS and ADP reports.