Brian Chappatta, Columnist

Shocking Jobs Report Boosts Yield-Curve Steepening

Treasuries are starting to indicate that the worst economic damage is in the rear-view mirror.

June 5, 2020 at 1:58 PM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

Hair-raising jobs report.
Photographer: George Freston/Hulton Archive/Getty Images

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Quants made U.S. Treasuries interesting again this week. Then U.S. jobs data sent a fresh shockwave through the world’s biggest bond market.

For each of the past three months, the monthly U.S. jobs report — long considered one of the most important indicators of the health of America’s economy — hasn’t mattered much at all for the $19.2 trillion Treasuries market. The future was so uncertain because of the coronavirus pandemic, and the Federal Reserve was adding so much debt to its balance sheet, that bond traders saw little reason to test yield ranges near the lowest in history. Effectively, Treasury yields, among the purest market expressions of the economic outlook, were also stuck in lockdown.