Bond Market Update

Data Recon

• The Advance Q4 GDP report showed real GDP decelerating to a seasonally adjusted annual rate of 2.3% (Briefing.com consensus 2.3%) versus 3.1% in the third quarter. The GDP Price deflator increased to 2.2% (Briefing.com consensus 2.4%) from 1.9% in the third quarter.
  • The key takeaway from the report is that there were stronger growth attributes in the fourth quarter than the headline number suggests. To that end, personal consumption expenditures were up 4.2% -- the strongest since Q1 2023 -- and real final sales of domestic product, which excludes the change in private inventories, was up 3.2%.
• Initial jobless claims for the week ending January 25 decreased by 16,000 to 207,000 (Briefing.com consensus 221,000) while continuing jobless claims for the week ending January 18 decreased by 42,000 to 1.858 million.
  • The key takeaway from the report is the low level of initial jobless claims -- a leading indicator -- which is a good signal for growth prospects, as it conveys a reluctance on the part of employers to let employees go.
• Yield check:
  • 2-yr: -2 bps to 4.21%
  • 3-yr: -3 bps to 4.24%
  • 5-yr: -4 bps to 4.32%
  • 10-yr: -5 bps to 4.51%
  • 30-yr: -4 bps to 4.76%