Treasury Yields Drop

Published January 31, 2025

U.S. Treasury yields fell after minutes from the Federal Reserve’s January policy meeting were released, and investors assessed the Fed’s decision to pause cutting interest rates further. Yields trended lower toward the end of the week as the latest employment data showed the lowest unemployment claims filed in over three weeks.

On Wednesday, the Federal Reserve released the minutes from the Federal Open Market Committee (FOMC) meeting held on January 28 and 29, 2025. At the meeting, policy makers agreed to hold the benchmark rate steady at a range of between 4.25% to 4.50%. Recent data shows inflation remaining at about half a percentage point or more above the Fed’s 2% goal.

"Pressing the pause button," said head of multisector fixed income investing at Goldman Sachs Asset Management, Lindsay Rosner. "[T]he FOMC will want to see further progress in the inflation data to deliver the next rate cut highlighted by the fact they removed the reference on inflation making progress."

The benchmark 10-year Treasury note yield opened the week of January 27 at 4.63% and traded as low as 4.48% on Thursday. The 30-year Treasury bond opened the week at 4.85% and traded as low as 4.75% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 16,000 to 207,000 for the week ended January 25. This was less than analysts’ estimates of 220,000 claims. Continuing unemployment claims fell by 42,000 to 1.86 million.

“Today’s claims data support the Fed chairman’s assertion at his press conference yesterday that the [Federal Open Market Committee] need not be in any rush to ease monetary conditions again,” said chief economist at High Frequency Economics, Carl Weinberg.

The 10-year Treasury note yield finished the week of 1/27 at 4.54% while the 30-year Treasury note yield finished the week at 4.79%.