Bond Market Commentary

Over in bond land, Treasury yields are mostly higher before the opening bell Friday as the market digested the Federal Reserve’s (Fed’s) latest rate cut and updated Summary of Economic Projections. Investors are looking ahead to next week’s key data releases, including November’s jobs report and Consumer Price Index. As of 7:01 AM ET, the yield on the 10-year note is rising one basis point (0.01%) to 4.17%, while the 30-year bond yield is increasing two basis points (0.02%) to 4.82%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is unchanged at 3.54%.

Treasury yields were mostly higher on Thursday as initial jobless claims increased while continuing claims for the week prior declined. The U.S. trade deficit for September unexpectedly narrowed, coming in at $52.8 billion. Meanwhile, the finalized September reading of wholesale inventories rose more than expected, though wholesale trade sales unexpectedly decelerated by 0.2% month-over-month. The yield on the 10-year note was up one basis point (0.01%) to 4.16%, while the 30-year bond yield also rose one basis point (0.01%) to 4.80%. The yield on the two-year note was unchanged at 3.54%. As of end of day Thursday (December 11), futures markets are pricing in six basis points (0.06%) worth of rate cuts at the Fed's upcoming January meeting, with a cumulative 55 basis points (0.55%) worth of rate cuts by year-end 2026 and a cumulative 49 basis points (0.49%) worth of rate cuts by year-end 2027.

In the central bank space, Chicago Fed President Austan Goolsbee, Cleveland Fed President Beth Hammack, and Philadelphia Fed President Anna Paulson are scheduled to speak today.

Mortgage rates were higher in the latest week.
For the week ending December 11, the average 30-year fixed mortgage rate was up three basis points (0.03%) to 6.22%, versus 6.60% a year ago. The 15-year fixed mortgage rate increased 10 basis points (0.10%) to 5.54%, versus 5.84% a year ago.

The Bloomberg 30-day visible supply fell $1.710 billion to $9.142 billion on Thursday, below the 12-month average of $13.906 billion.

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