Treasury yields pull back on last trading day of 2024

U.S. Treasury yields were lower on Tuesday, the final trading day of the year, as investors considered the outlook for 2025.

Shortly after 8 a.m. ET, the yield on the 10-year Treasury was down by 2 basis points at 4.521%. The 2-year Treasury yield was last down 2 basis points at 4.231%.

Yields and prices move in opposite directions and one basis point is equivalent to 0.01%.

Treasury yields on Tuesday extended Monday's declines, which came after the 10-year Treasury yield hit a multi-month high last week after rising distinctly across the last three months of the year. Investors considered what could be in store for markets in 2025 and weighed some of the last economic data points of 2024.

Data released Monday painted a mixed picture, with November's pending home sales figures beating expectations and rising to the highest level in a year, while factory activity in the Chicago area fell by more than anticipated.

On Tuesday, investors will be watching out for the latest home price figures, before fresh weekly initial jobless claims data and insights into the manufacturing sector are slated for the later part of the week.

Besides following the latest economic data, investors have also been considering the path ahead for the Federal Reserve interest rate policy after the central bank indicated that fewer rate cuts were likely going to be implemented in the months ahead.

Expectations for further rate cuts have been pared back, with markets mulling over how many more reductions are likely. The Fed is next set to meet toward the end of January, with markets last expecting rates to be left unchanged then, according to LSEG data.

Markets will close early Tuesday and remain shut Wednesday in observance of New Year's Day.