Musings on Markets · 2025-01-28 · 492d

Central Banks, Market Interest Rates, and Macro Fundamentals: 2024 Analysis

This analysis examines 2024 treasury and corporate bond rate movements, challenging the conventional wisdom that central banks directly control market interest rates. The author argues that macro fundamentals—inflation and real GDP growth—are the primary drivers of interest rates, with central banks having limited power to alter market trajectories despite policy actions.

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Metrics in this report

10-Year Treasury Bond Annual Return

-1.64%

nominal

2024

10-Year Treasury Rate

4.58%

year-end

2024

10-Year Treasury Rate

3.88%

year-start

2024

10-Year Treasury Real Return

-4.27%

inflation-adjusted

2024

3-Month Treasury Bill Rate

4.37%

year-end

2024

3-Month Treasury Bill Rate

5.40%

year-start

2024

Inflation Rate

2.75%

annual

2024