Tensions rose surrounding the Treasury market as the weighted average interest rate on outstanding Treasury debt is currently around 3.3%, a 15-year high. Additional Treasury debt issuance has become a contention as weakened demand for new bonds became more apparent.

Bond yields were challenged throughout 2024 as uncertainty surrounding the Fed’s decision to reduce rates lingered. The Fed’s initial rate reduction in September 2024 was the commencement of additional rate cuts over the next couple of years. Inflation data will be the primary driver of the Fed’s trajectory for rate cuts in 2025.

Sources: Treasury Dept., Federal Reserve

Print Version: Fixed-Income-Overview-Jan-2025

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