In 2024, the Federal Reserve cut interest rates three times, but market interest rates rose, contradicting expectations. The 10-year treasury rate increased by 0.70% to 4.58% by the end of the year, while the 3-month treasury bill rate declined by 1.03% to 4.37%. The yield curve flattened out over the course of the year, but this does not necessarily predict economic growth. The increase in long-term treasury rates resulted in a -1.64% annual return for 2024, and a -4.27% real return when factoring in inflation. Central banks do not have complete control over interest rates, which are ultimately driven by macro fundamentals such as inflation and real growth. The "intrinsic riskfree rate" can be estimated using inflation and real GDP growth rates, and this rate is closely linked to the observed 10-year treasury bond rate. The Federal Reserve's actions do affect interest rates, but the impact is stronger at the short end of the treasury spectrum than at the long end. The Fed's influence on interest rates stems from its access to data, credibility, and signaling intent through its actions. The Fed's ability to affect interest rates is limited, especially when interest rates approach zero, and the market may lead the Fed in setting rates rather than the other way around.