Report to the Secretary of the Treasury from the Treasury Borrowing Advisory Committee

October 29, 2024Letter to the SecretaryDear Madam Secretary,Since the TBAC last met in late July, 2-year Treasury yields have declined about 30 basis points following the Federal Reserve beginning policy rate reduction with a 50 basis point decrease in September. 2-year yields had declined to as low as 3.5% and 10-year yields to 3.6% after jobs reports in July and August showed a rising unemployment rate and slowing payroll employment. But a stronger jobs report in September led yields to rise leaving 10-year yields at 4.25%, roughly unchanged from late July. Treasury markets are likely to remain sensitive to job market data, Federal Reserve policy expectations, and market expectations for the upcoming US election and fiscal policy.A string of softer inflation readings contributed to the shift in market and Federal Reserve official attention away from upside risk to prices and toward downside risk to employment.