Rick Santelli with the Bond Report. Rick, it appears that uh John Williams may have saved Christmas. >> Well, I'm not sure about that.It certainly seems to me like there's a lot of other moving parts here, but it definitely moved the probabilities on the ease and the probabilities have gone from basically 30% up into the close to 70 and it's backed off but right under 70%. But I think the real story is h how the interest rate complex is shadow boxing uh the equity side and mostly when it goes higher. Now if ...

Treasury Yields & Market Trends - Two-year Treasury yield closed at the lowest since September 2022 [1] - Ten-year Treasury yield closed at the lowest since October 2024 (approximately one year prior) [2][3] - Trading ranges for both two-year and ten-year treasuries have been narrow recently [2][3] - Market participants are showing apprehension about trading below 4% due to lack of follow-through [3] Funding Market Indicators - Secured Overnight Funding Rate (SOFR) decreased from 430 basis points to 418 basis points [4] - Yellow flashing for funding markets is coming down a bit [4] Equity Market Reaction - Equity market seemed to look past the funding market dynamics [4]

Market Impact - Deutsche Bank strategists predict that the potential removal of Federal Reserve Chair Jerome Powell by Donald Trump could increase the 30-year Treasury yield by over 0.5 percentage point [1]

Core Insights - The 10-year Treasury note serves as a crucial fundraising tool for the U.S. government and is viewed as a safe investment, reflecting overall economic sentiment [1][2][3] Group 1: Treasury Note Overview - The 10-year Treasury note is issued by the U.S. Treasury to individuals, financial institutions, and foreign governments, providing fixed interest payments every six months until maturity [2][3] - Treasury notes are considered among the safest investments due to being backed by the U.S. government [3] Group 2: Impact on Mortgage Rates - The 10-year Treasury yield is a reference point for national long-term interest rates, particularly mortgage rates, which typically move in tandem with Treasury yields [4] - Historically, the spread between the 10-year Treasury yield and mortgage rates has been between one to two percentage points, but it has recently widened to over two percentage points [4][5] Group 3: Treasury Yields and Economic Indicators - Treasury yields are influenced by various market factors, including overall economic conditions, inflation, and interest rate moves by the Federal Reserve [8] - The relationship between Treasury yields and mortgage rates can be volatile, with recent trends showing that yields rose following the Federal Reserve's rate cuts [6][9] Group 4: Investment Characteristics - Treasury yields represent the return on investment, with fixed-rate interest paid every six months, and the principal returned at maturity [9][10] - The relationship between bond prices and yields is inverse; as prices rise, yields fall, indicating investor sentiment regarding inflation and economic growth [11][12] Group 5: Treasury Instruments - Treasury instruments include bills, notes, and bonds, differentiated by their maturities, with notes typically issued in two to 10-year maturities [15] - The 10-year Treasury note is considered a low-return fixed-income investment, appealing to risk-averse investors [16]