2023-12-30 01:44:52
After a year of ups and downs, the United States 10-Year Treasury Bond YieldWe’ll end 2023 almost exactly as we started the year.
10-year U.S. Treasury yieldIt fell to 3.25% following the banking crisis in March, but rose above 5% for the first time in 16 years just a few months later. Then on the last trading day of this year,10-year U.S. Treasury yieldIt fell 2 basis points to around 3.866%, almost back to the original point at the beginning of the year (near 3.9%).
Jack McIntyre, portfolio manager at Brandywine Global Investment Management, said: “For the long duration of the U.S. bond curve, investors get coupons, but following adjusting for stress, it feels like you lost money on the bonds in 2023. 2024 will be It’s been another tumultuous year.”
As of the last trading day of this year,10-year U.S. Treasury yieldis 3.879%, slightly higher than the 2022 closing price of 3.875%. U.S. Treasury yields and prices move in opposite directions.
2023 is an important year for U.S. debt as the Federal Reserve continues to aggressively raise interest rates and investors are worried regarding high inflation and a potential recession.10-Year Treasury Bond YieldIt topped the 5% threshold in October for the first time since 2007, but fell below 3.9% in recent weeks as investors bet the Fed would end its rate cuts and raise rates next year.
As investors look ahead to 2024, questions remain regarding when the Fed will begin its expected cycle of rate cuts and how deep it will actually be.
The Federal Reserve said earlier this month it expected to cut interest rates three times next year, but some investors are hoping for further cuts. The first rate cut is widely expected in March 2024, according to CME’s FedWatch tool.
Uncertainty also remains regarding the state of the U.S. economy and whether the Federal Reserve will achieve a soft landing and avoid a recession while interest rates remain high.
Holger Schmieding, chief economist at Berenberg, predicts: “The U.S. economic growth rate will fall below 1% in the first half of 2024. Nonetheless, the Federal Reserve is still expected to achieve a soft landing in 2024, an economic feat that is usually difficult to achieve. The Fed is expected to The Fed will cut interest rates for the first time in May, and an easing in underlying inflation is encouraging bond and stock market strength.”
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