US Hiring Growth is Expected to Have Slowed in December

Yields close nearly flat in a shortened trading session. There was little volatility in bond markets today with most attention geared toward tomorrow’s labor data, which is expected to show slowed hiring growth from November (227k jobs added) to December (165k jobs added).  Yields closed 1-2 bps lower after trading within a 3 bp range, and 2-year and 10-year yields are now at 4.26% and 4.69%, respectively. Equity markets were fully closed today, with the NASDAQ and S&P 500 up 0.87% and 0.62% so far this year, respectively.

Fed President Collins offers hawkish commentary. Boston Fed President Susan Collins ultimately supported the Fed’s most recent rate cut, but she clarified today that her vote was a “close call.” She added that the move “provided some additional insurance to preserve healthy labor market conditions while maintaining a restrictive policy stance that is still needed to sustainably restore price stability.” Collins believes that “considerable uncertainty” for the US economy warrants a more cautious approach throughout the year ahead, and she expects slower progress against inflation as well. Meanwhile, Philadelphia Fed President Harker said today that he expects further rate cuts in 2025, though the timing remains uncertain and is “dependent” on economic data.

Rare state funeral honors late president Jimmy Carter. Republicans and Democrats alike gathered at Washington National Cathedral today to pay tribute to former President (and famed peanut farmer) Jimmy Carter. After his presidency, Carter dedicated time to charitable efforts, notably working to eradicate neglected tropical diseases in developing countries. All five living presidents attended the funeral today, along with various other high-profile political figures.