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Yields Decline on Lower Volume As Holidays Approach

Rates closed slightly higher this week after trading in a narrow range throughout the week.  With the Christmas and New Year's holidays coming in the next couple weeks, markets are expected to be quiet with lower trading volumes.  The primary focus of the fixed income markets this week was the Federal Reserve Open Market Committee's final meeting of the year.  The Committee indicated that the Fed would remain focused on providing open-ended stimulus to the economy heading into 2021.  Labor markets continue to be extremely weak as economic recovery appears unlikely in the absence of a widely administered COVID vaccine.  This week's jobless claims numbers once again disappointed as nearly 900,000 Americans filed first-time claims for unemployment benefits.  Concerns around holiday spending also arose as November's retail sales declined much more than forecast.  The silver lining to the negative data is that it is likely to spur additional fiscal stimulus.

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