U.S. 10-year Treasury yields rose to 4.80% on January 13, reaching their highest level since November 2023, after strong December U.S. employment data was released on January 10.
The Fed has cut rates by a total of 1% in response to concerns about an economic slowdown, starting with a 0.5% cut in September, followed by 0.25% cuts in both November and December.
However, since the Fed began cutting rates, the 10-year yield has actually “increased” by more than 1%.
Financial markets broadly consist of three types of assets: interest rates, foreign exchange, and stocks.
While many individual investors are familiar with forex and stocks, they may not be as clear about interest rates.
Yet interest rates, especially long-term rates like government bonds, are extremely important for understanding overall market trends.
