US 10Y TREASURY: adjusting to Fed`s narrativeThe largest surprise during the Holiday week on the Western markets was a sudden move of the 10Y US benchmark yields toward the higher grounds. The 10Y yields reached the level of 4,629% after weightening the Fed`s narrative from the last FOMC meeting. The market is now anticipating a more hawkish Fed's policy in 2025. The next FOMC meeting is scheduled for January 2025, but there is no expectation that the Fed will make any move in interest rates during this meeting. As Fed Chair Powell noted in his statement in December, the Fed will continue to look at inflation and strength of the job market, before it decides on a next rate cut. Inflation is expected to stay sticky in 2025, while the market will continue to listen closely what Fed is saying.
