As investors weigh the economic outlook, treasury yields increase.

On Thursday, U.S. Treasury yields increased as investors considered the economic and financial market trajectory approaching the new year.

The yield on the increased by more than 5 basis points to 3.844%. The yield increased by more than 3 basis points to 4.275%.

Prices and yields move in opposite directions, with one basis point equal to 0.01%.

As 2024 nears, investors are closely monitoring the Federal Reserve's monetary policy decisions and the possibility of a recession.

The Fed anticipates reducing interest rates three times in 2024, with inflation decreasing further, according to its recent meeting. Investors are optimistic about the likelihood of this happening based on recent economic data.

The uncertainty surrounding the implementation of rate cuts and their potential to prevent a recession in the U.S. remains.

The Fed's March meeting is anticipated to see the first rate cut, according to CME Group's FedWatch tool.

The number of initial unemployment claims increased by 12,000 last week, as shown in the jobless claims data released on Thursday.

The increase in continuing unemployment claims and their persistence may indicate that recession is approaching, but the filings are still below the level of recession warnings, according to Chris Rupkey, chief economist at FWDBONDS.

If a recession is imminent, it seems to be taking its time arriving," he stated. "Federal Reserve and Wall Street economists have largely abandoned their recession predictions for 2024, as inflation has decreased more rapidly than anticipated in recent months. However, there is some smoke but no fire in the recession forecasts if we examine the latest jobless claims data.