Markets Wrap Up 2024 with a Cautious Eye on 2025
As the final trading day of the year came to a close, investors took a step back to assess the outlook for 2025. The yield on the 10-year Treasury note dipped by over two basis points to 4.5187%, while the 2-year Treasury yield fell by more than two basis points to 4.2333%. This downward trend extended Monday’s declines, which followed a multi-month high reached last week.
Economic Data Paints a Mixed Picture
Monday’s data release presented a conflicting narrative, with November’s pending home sales figures surpassing expectations and reaching a one-year high. Conversely, factory activity in the Chicago area fell short of predictions. Today, investors will be watching the latest home price figures, followed by fresh weekly initial jobless claims data and insights into the manufacturing sector later in the week.
Federal Reserve Interest Rate Policy Under Scrutiny
Investors are also closely monitoring the path ahead for the Federal Reserve’s interest rate policy. The central bank has hinted that fewer rate cuts are likely in the coming months, leading to pared-back expectations. Markets are now pondering how many more reductions are probable. The Fed is set to meet again at the end of January, with markets anticipating rates to remain unchanged, according to recent data.
Markets Prepare for the New Year
As markets close early today and remain shut tomorrow in observance of New Year’s Day, investors are taking a moment to reflect on the year that was and look ahead to the challenges and opportunities that 2025 may bring. With economic data and interest rate policy top of mind, it’s clear that the new year will be filled with twists and turns.
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