The 10-year Treasury yield slipped further on Monday 18th December 2023, as the final full trading week of 2023 gets underway.
Traders are attempting to digest the ‘dovish’ tone of the U.S. Federal Reserve. The central bank held its key interest rate at 5.5% and revealed that policymakers were pencilling in at least three rate cuts in 2024 marking a more aggressive series of cuts than what was previously expected.
The yield on the 10-year Treasury was marginally lower at 3.913%. Last Thursday, the yield fell below the 4% level, hitting its lowest since July this year.
Bank strategists described the Fed’s move as a ‘big shift’
Guessing game starts
The question now is when will these rate cuts happen, and on Friday we had some mild pushback from Fed officials against the market excitement.