Bond Market Update

Good form

• Treasuries are off their best levels of the day, but continue to show good form on the heels of yesterday's decision by the FOMC to leave the target range for the fed funds rate unchanged at 4.25-4.50% and Fed Chair Powell pronouncing that it is the broad view of the Committee that it need not be in a hurry to adjust its policy stance. 
• Today's data corroborated the Fed's thinking. Initial jobless claims were a low 207,000, and although Q4 GDP looked somewhat average at 2.3%, it was driven by strong personal spending. Excluding the change in private inventories, real final sales of domestic product were up 3.2%.
• The major equity indices are trading in mixed fashion, largely because of weakness in several mega-cap components, namely Microsoft (MSFT) and NVIDIA (NVDA). The broader market, though, is looking good with the equal-weighted S&P 500 up 0.9% and the Russell 2000 up 1.0%.
• Yield check:
  • 2-yr: -1 bp to 4.22%
  • 3-yr: -2 bps to 4.25%
  • 5-yr: -3 bps to 4.33%
  • 10-yr: -3 bps to 4.53%
  • 30-yr: -3 bps to 4.77%