Treasury yields rose on Friday as traders digest strong numbers latest jobs report This is likely to keep the Federal Reserve aggressive against inflation.
Yield on Benchmark 10 Years Treasure Rose about seven basis points to about 3.084%, while the yield on 30 Year Treasury Bond was up five basis points at 3.254%. Yields move inversely to prices, and one basis point equals 0.01%.
Investors absorbed the latest numbers in June’s employment report, with jobs growing faster than expected. According to the Bureau of Labor Statistics, non-farm payrolls increased by 372,000 last month. According to the Dow Jones, economists have predicted that the US economy will add 250,000 jobs.
The unemployment rate stood at 3.6%, unchanged from May.
The strong report will mean another sharp interest rate hike in July as the Federal Reserve focuses on bringing inflation down. On Thursday, two Fed officials — Christopher Waller and James Bullard — emphasized their support for another 75-basis-point increase this month. Many on Wall Street expect rates to rise further later in the year.
“In September, we are looking for another 50 and then 25 in each of the last two meetings. [this year]”Goldman Sachs chief economist Jan Hetzius said”Scream on the street.“I don’t think there is anything in this report that would distract us or the Fed from it.”
Meanwhile, market professionals continue to track the spread Between long-term Treasury yields and short-term yields, with the former typically higher. 2 Year Treasury Yield Friday narrowly held above 10 years. That so-called reversal, especially if sustained, is often interpreted as a warning sign that the economy may be weakening, and a recession may be on the horizon.
“The front end of the curve is telling us the Fed has the green light to continue fighting inflation, while the long end is saying a recession is on the way. A lot of economic indicators are showing clear signs of weakening, hence the expectations Should still remain high, the labor market will probably slow down in the fall,” Edward Moya, senior market analyst at Oanda, said in a note to clients.
— CNBC’s Elliot Smith, Carmen Renicke and Jeff Cox contributed to this report.