Treasury yields advanced on Monday, with the key 10-year rate approaching 4.6% after data showed U.S. consumer confidence pulled back in December.
It’s a holiday-shortened week, with the bond market closing early Tuesday and remaining closed Wednesday for Christmas.
Treasury yields surged on Monday with rates on 10- and 30-year U.S. government debt ending at their highest levels in at least seven months.
See: Consumer confidence dented by stock-market worries and threat of Trump tariffs
Consumer confidence in the United States deteriorated in December, the privately run Conference Board said in a Monday report. The index of consumer confidence came in at 104.7, falling from November’s reading of 111.7 and below a Dow Jones estimate of 113.
A postelection pop in consumer confidence fizzled at the end of the year owing to worries about the stock market and a potentially higher cost of living as a result of new tariffs, the survey showed.
In other economic data, durable-goods orders fell 1.1% in November to mark the third decline in the past four months. Economists polled by the Wall Street Journal had forecast a 0.3% increase.
Last week, yields pulled back on Friday after the personal consumption expenditures index, the Fed’s favored inflation gauge, showed core prices, which exclude food and energy, rose 2.8% in November on a year-over-year basis — unchanged from October and a shade below the 2.9% pace expected by Wall Street economists.
But yields still rose for the week. The Fed on Wednesday delivered a quarter-point rate cut, as expected, but signaled that monetary-policy makers expected only two rate cuts in 2025, versus previous expectations for four.
“The Treasury market is holding on to the recent price action as the holiday-shortened week gets underway. Tuesday’s early close, Wednesday’s market holiday, and skeleton staffing levels into year-end will combine to create either a listless drift in yields, or result in choppy price action as investors are reluctant to step in front of any meaningful repricing,” Ian Lyngen and Vail Hartman, rates strategists at BMO Capital Markets, said in a note.
