FOMC signals rate cuts in 2024, market responds bullishly

The Federal Open Market Committee (FOMC) signaled intentions to cut rates by 75 basis points in 2024, leading to a bullish response in the treasury market. 10-year yields dropped below 4%, creating a constructive setup for a year that is expected to feature rate cuts. Although New York Fed President Williams tried to moderate the market's perception, the bond bullish price action remained intact. However, the bond market may exhibit low liquidity and choppiness in the final two weeks of December, historically characterized by a lack of conviction.