Ten-Year Yield Closes Below 4% For First Time Since Late July

Treasuries moved sharply higher during trading on Thursday, extending the substantial rally seen over the course of the previous session.

Bond prices gave back ground some ground in afternoon trading after an early spike but remained firmly positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 10.3 basis points to 3.930 percent.

The ten-year yield added to the 17.3 basis point nosedive seen on Wednesday, closing below 4.0 percent for the first time since late July.

The extended surge by treasuries came as traders continued to react positively to the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed left interest rates unchanged, as widely expected, and signaled plans to cut interest rates three times next year.

Since the Fed’s projections are often more conservative, traders are expecting the central bank to slash rates even further than forecast in 2024.

Meanwhile, the Commerce Department released a report this morning showing an unexpected increase in U.S. retail sales in November.

The Commerce Department said retail sales rose by 0.3 percent in November after slipping by a downwardly revised 0.2 percent.

Economists had expected retail sales to edge down by 0.1 percent, matching the dip originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales inched up by 0.2 percent in November after coming in unchanged in October. Ex-auto sales were expected to slip by 0.1 percent.

The Labor Department released a separate report showing first-time claims for U.S. unemployment benefits unexpectedly decreased in the week ended December 9th.

The report said initial jobless claims fell to 202,000, a decrease of 19,000 from the previous week’s revised level of 221,000.

Economists had expected jobless claims to come in unchanged compared to the 220,000 originally reported for the previous week.

Trading on Friday may be impacted by reaction to the Federal Reserve’s report on industrial production in the month of November.

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