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10-year Treasury yield slides after weaker-than-expected GDP

Traders work at the New York Stock Exchange on Dec. 17, 2024.
NYSE

Traders work at the New York Stock Exchange on Dec. 17, 2024.

U.S. Treasury yields moved lower on Thursday as economic data showed slower-than-expected growth for the United States in the fourth quarter.

The 10-year Treasury yield was lower by 3 basis points at 4.526%. Meanwhile, the 2-year Treasury yield was down 1 basis point to 4.213%.

One basis point is equal to 0.01% and yields and prices move in opposite directions.

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The move in yields came as the Commerce Department's gross domestic product report was weaker than expected. The fourth-quarter GDP growth rate was 2.3%. Economists surveyed by Dow Jones had been expecting an increase of 2.5%.

Traders will weigh the economic growth data alongside the latest update from the Federal Reserve. On Wednesday, the central bank's Federal Open Market Committee left its overnight borrowing rate unchanged at a range between 4.25%-4.5%, in a move that investors had been anticipating after three consecutive cuts since September 2024.

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Policymakers noted in a post-meeting statement that "inflation remains somewhat elevated" and "the unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid."

They added that the central bank would need to see "real progress on inflation or some weakness in the labor market before we consider making adjustments."

Investors were pricing in a nearly 100% chance that the Fed would keep rates steady in this meeting, and don't see another cut coming till June.

At a press conference following the decision, Fed Chair Jerome Powell said he will not be responding to President Donald Trump's demands for immediate interest rate cuts, and that he had "no contact" with Trump since the comments were made last week.

"I'm not going to have any response or comment whatsoever on what the president said," Powell said at his press conference on Wednesday. "It's not appropriate for me to do so."

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