Traders Bet on Fewer 2026 Rate Cuts After Strong Labor Data
Jobseekers talk to recruiters during a job fair in the Bronx borough of New York.
Photographer: Yuki Iwamura/BloombergA strong US employment report caught investors in the $30 trillion Treasury bond market off guard, sending yields surging as traders lowered their expectations for Federal Reserve interest-rate cuts this year.
Yields on two-year notes — which are most sensitive to the central bank’s policy changes — jumped as much as 9.5 basis points to 3.55%, then eased back to 3.5% by the end of Wednesday’s trading session. Benchmark 10-year yields rose three basis points to 4.17% after a $42 billion auction of the securities saw demand fall short of expectations.