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Bond Markets Clear Path for Stock Rally by Ignoring a Near-Term Risk.

stock :: 2025-12-24 :: source - barrons

By Martin Baccardax

Bond markets are doing their part to deliver a Santa Claus rally for stocks as investors up the ante on more Federal Reserve rate cuts in the new year and brush off inflation worries in the world’s biggest economy. A softer-than-expected inflation reading for the month of November, published last week, along with the expected new leadership at the Fed pushing for deeper rate cuts, have driven short-term Treasury bond yields sharply lower over the past two weeks. Further pressure has been building on shorter-term Treasury bill yields as the Fed begins its monthslong effort to ease liquidity concerns in the banking sector through a program of regular monthly purchases expected to last until late spring.

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