US Treasury yields experienced an increase on Tuesday, reversing an earlier bond rally, amidst revised jobs data that reinforced the outlook for a softening labour market. This development further strengthens the argument for multiple Federal Reserve rate cuts later in the year. The benchmark 10-year Treasury note yield increased by 2.8 basis points, settling at 4.074 per cent, after briefly dipping to a session low of 4.04 per cent following the release of the revised jobs figures. The 30-year bond yield also saw a climb of 2.8 basis points, reaching 4.727 per cent.
The Labor Department reported that the US economy likely created 911,000 fewer jobs in the 12 months leading up to March than initially estimated. This downward revision initially led to a paring of gains in benchmark yields. Economists had predicted the revision would fall between 400,000 and 1 million jobs. This news highlights that job growth may have been slowing even before the implementation of President Trump’s tariffs on imports.
The spread between the two- and 10-year Treasury notes, a closely monitored indicator of economic expectations, stood at a positive 52.8 basis points. The two-year US Treasury yield, which typically mirrors interest rate expectations concerning the Federal Reserve, rose by 4.9 basis points to 3.544 per cent. These movements in the yield curve reflect ongoing adjustments in the market’s anticipation of future economic conditions and monetary policy.
