Surging Treasury Yields Complicate Federal Reserve
A stronger-than-expected jobs report and inflation concerns push expectations for Fed rate cuts to late 2025, fueling economic uncertainty under the incoming Trump administration.
- The December jobs report revealed 256,000 new hires, surpassing expectations and signaling a resilient labor market.
- Rising Treasury yields, with the 10-year note nearing 4.8%, have heightened concerns about inflation and increased borrowing costs for consumers and businesses.
- Markets now anticipate the Federal Reserve will delay interest rate cuts until at least October, with some analysts suggesting the possibility of further hikes instead.
- Higher yields are pressuring stock valuations, mortgage rates, and consumer confidence, complicating economic recovery prospects in key sectors like housing.
- The incoming Trump administration's fiscal policies, including potential tariffs and tax cuts, are adding to inflation fears and market volatility.
The Street 