Treasury Yields Surge on Blockbuster January Employment Growth
- Two-year note yields lead rise, climbing 21 basis points
- Strong ISM services rebound extends bond market rout
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US government bonds slumped Friday as stronger-than-expected job creation and service-sector activity undermined wagers on a recession that will force the Federal Reserve to cut interest rates by year-end.
The selloff, which lifted short-maturity yields by more than 20 basis points, left the market little changed on the week as it erased gains that accumulated after the Fed’s latest rate increase on Wednesday. Investors interpreted Chair Jerome Powell’s comments that day as consistent with a bullish outlook, even as Powell also said more increases were likely and cuts this year were not.