Treasuries were mixed across the curve, with the 1-year yield falling by 2 basis points and the 5-year rising by 2 basis points, while the 10-year remained flat, and the long end dipped by just 1 basis point. In contrast, MMD yields rose across the board, particularly at the long end where the 20-year and 30-year climbed 7 and 8 basis points, respectively. Looking ahead, the week begins on Tuesday with Consumer Confidence, which is expected to come in at 90.0 versus the prior reading of 89.1. The focus then shifts to Wednesday for the year’s first FOMC announcement and press conference, where markets are pricing in a greater than 97% chance of rates remaining unchanged. Finally, the week wraps up with Jobless Claims on Thursday, expected to rise slightly to 205k, followed by the Chicago PMI on Friday.

Treasury yields rose across the curve, climbing 1 to 3 basis points at the 1-year and 30-year levels and 3 to 7 basis points across the 5, 10 and 20-year maturities. Conversely, municipal yields fell by a few basis points across most of the curve, led by a significant 11 basis point drop in the 1-year yield. Amid this broad decline in rates, municipal bond funds attracted $1.8 billion in inflows, which is up from $1.5 billion the prior week, marking eight consecutive weeks of positive flows and sustaining strong momentum into 2026. The economic calendar remains relatively quiet this week with jobless claims due Thursday, where the market forecasts 205k, slightly above the previous 198k reading. Friday brings Consumer Sentiment data, expected to hold steady at 54.0, alongside the PMI Composite Flash. Meanwhile, markets are pricing in a 95% chance of no Fed rate cut in January, leaving only a 5% probability of a 25-basis point cut as we approach the blackout period and the January 28 interest rate decision.