In the wake of the late-session sell-off on Wednesday, the treasury market witnessed a significant downward trend during Thursday's trading. Bond prices experienced pressure from the outset and maintained their decline throughout the day. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, rose by 7.6 basis points to 4.570 percent.
This increase builds on the 10.9 basis point rise recorded on Wednesday, marking the yield's highest closing level in over half a year. The Federal Reserve's monetary policy announcement continued to cast a shadow over treasuries, as the central bank cut interest rates by a quarter point, aligning with general expectations, yet projected fewer rate cuts for the following year than previously anticipated.
The persistent weakness in treasuries was also influenced by a suite of generally positive economic data, which has effectively bolstered the Fed's cautious stance on implementing further rate reductions.
The Commerce Department revealed an unexpected surge in U.S. economic growth for the third quarter, with gross domestic product climbing by 3.1 percent. This figure represents an upward revision from the previously reported 2.8 percent increase, surpassing economists' expectations that had predicted no change.
Additionally, the Labor Department reported a sharper than predicted decline in initial claims for U.S. unemployment benefits for the week ending December 14th. The initial jobless claims dropped to 220,000, a decrease of 22,000 from the prior week's unchanged level of 242,000, against the projected fall to 230,000.
Attention is likely to shift to a report on personal income and spending set for release on Friday, which includes the Federal Reserve's favored measures of consumer price inflation.
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