Treasury Yields Tumbled after Dismal Jobs Report
Weaker Payrolls, Higher Unemployment Fuel Yield Decline
U.S. Treasury yields took a nosedive on Monday, extending a downward trend that began after Friday’s underwhelming April employment report revealed weaker-than-anticipated payroll growth and a surprise uptick in unemployment.
The yield on the crucial 10-year Treasury note retreated by 2 basis points to 4.4975%, while the 2-year Treasury yield shed a modest amount to 4.8056%. It’s worth noting that yield and price movements are inversely correlated.
Disappointing Jobs Data Raises Market Expectations
The Bureau of Labor Statistics reported a meager 175,000 increase in nonfarm payrolls last month, falling short of economists’ consensus prediction of 240,000. Moreover, the unemployment rate unexpectedly rose to 3.9%, defying market projections of remaining unchanged at 3.8%. Wage growth also came in below expectations, further fueling the concerns.
Rate Cut Uncertainty Hangs in the Air
In recent weeks, there has been growing uncertainty among investors regarding the timing and extent of potential interest rate cuts this year. Many now believe that fewer cuts are likely, and they may not materialize until later in the year. Friday’s disappointing labor report könnte lead to the Federal Reserve cutting rates sooner.
Fed Officials to Address Economy
On the economic front Monday, several Federal Reserve officials are scheduled to speak. Richmond Fed President Tom Barkin and New York Fed President John Williams will both share their insights on the current economic landscape.
Data sourced from: cnbc.com
