U.S. Treasury yields churned between gains and losses on a volatile first trading day for the new year.
The yield on the 10-year Treasury fell more than 1 basis point at 4.561%. The 2-year Treasury yield was last at 4.246% after falling less than 1 basis point.
Yields and bond prices have an inverted relationship. One basis point equals 0.01%.
Treasury yields were lower earlier on Thursday, drifted higher in late morning trading, and then dipped again in the afternoon. The benchmark 10-year Treasury yield traded as low 4.517, and as high as 4.599%.
Bond markets reopened Thursday after closing early Tuesday and remaining shut Wednesday in observance of New Year's Day. Treasurys had a choppy 2024, with the yield on the 10-year Treasury starting the year below 3.9%, before rising above 4.7% in the spring, retreating back to below 3.7% in the fall and ending the year above 4.5%.
The 10-year yield did move lower in the final week of 2024, but it should move higher again in the new year, Barry Knapp, director of research at Ironsides Macroeconomics, on CNBC's "The Exchange."
"We have still some real serious headwinds in the Treasury market. On balance, Treasuries are still overvalued even at these levels," Knapp said.
Money Report
The holiday-shortened week is light on the economic data front, but investors nonetheless are watching for clues about what could lie ahead for the economy, monetary policy and markets in the coming months.
On Thursday, initial jobless claims for the week ending Dec. 28 came in at 211,000, below the 225,000 projected by economists, according to Dow Jones. The reading was down from a revised number of 220,000 in the prior week. Continuing jobless claims, which run a week behind, also declined.
Data on Friday will bring insights into the manufacturing sector. Attention will then turn to a series of jobs data and the minutes from the Federal Reserve's latest meeting, which are slated for next week.
In December, the Fed indicated that fewer interest rate cuts were now on the horizon. Policymakers will meet again at the end of January, and are expected to hold rates steady according to CME Group's FedWatch Tool.
