Jerome Powell, chairman of the US Federal Reserve, during the Hoover Institution’s George P. Shultz Memorial Lecture Series in Stanford, California, US, on Monday, Dec. 1, 2025.
Jason Henry | Bloomberg | Getty Images
U.S. Treasury yields held steady Monday as expectations continued to rise on an interest rate cut at the Federal Reserve’s meeting on Wednesday.
The 10-year Treasury yield was up more than 1 basis point at 4.157%, as was the 30-year Treasury yield at 4.81%. The 2-year Treasury yield climbed more than a basis point as well to 3.579%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
Markets are expecting that the Fed will cut its key interest rate at its final meeting of the year, with traders pricing in around a 90% chance of a 25-basis-point cut when the central bank concludes its two-day meeting, according to the CME FedWatch tool. Investors priced in a near 67% chance of a cut one month ago.
On Friday, Morgan Stanley reversed its December call to a quarter-percentage point cut, with strategists saying “it seems we jumped the gun.” JPMorgan and Bank of America are also forecasting a cut based on more recent dovishness from Fed officials.
It follows last week’s data releases from payroll processor ADP, which reported a surprising decline in private payrolls, and the Labor Department, which showed jobless claims for the week ended Nov. 29 fell to the lowest level since September 2022.
Elsewhere, Treasury Secretary Scott Bessent said on Sunday that the holiday season has been “very strong,” suggesting that the U.S. economy would end the year on a strong footing.
“The economy has been better than we thought. We’ve had 4% GDP growth in a couple of quarters,” he said in an interview on CBS News’ ‘Face the Nation.’ “We’re going to finish the year, despite the Schumer shutdown, with 3% real GDP growth.”
Across the Atlantic, European central banks will also be watching the Fed’s decision as their own final policy meetings take place this week and next. The Swiss National Bank will deliver its latest policy update on Thursday and rate decisions are expected from the Bank of England and European Central Bank on Dec. 18.
Meanwhile, the Bank of Japan is also set to hold its last policy meeting of 2025 on Dec. 19.
— CNBC’s Ryan Ermey and Holly Ellyatt contributed to this report.
