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Treasury Curve Flattens as Jobs Report Leaves Fed Outlook Intact

  • Two-year note’s yield briefly climbed to highest level of year
  • Mixed employment data seen to allow accelerated taper
An Amazon Fulfillment Center On Cyber Monday
Photographer: Michael Nagle/Bloomberg
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The U.S. two-year note’s yield reached the highest level of the year after U.S. employment data showed underlying strength and wage pressures viewed as likely to keep the Federal Reserve on a path toward tightening monetary policy next year. 

The policy-sensitive two-year note’s yield climbed to 0.653%, eclipsing its prior peak reached Nov. 24. Yields across the curve subsequently retreated from session highs as U.S. equity benchmarks fell and were mostly lower shortly before midday in New York, with the two-year little changed on the day.