Strong jobs report leads to surge in Treasury yields, raising concerns about inflation and rate hikes.

From Investing.com: 2025-01-13 01:00:37

A surge in U.S. Treasury yields is expected to continue after a strong jobs report suggests interest rates will remain high. The data revealed employers added 256,000 jobs in December, leading to concerns about inflation and speculation that the Fed may hike rates. Yields on 10-year Treasuries hit 4.79%.

Traders now anticipate the Fed will likely wait until at least June to reduce its policy rate, with expectations previously set for a cut in May. Concerns over inflation have caused analysts to consider the possibility of a rate hike, a scenario that was previously unlikely. The yield curve has steepened, indicating ongoing economic resilience.

The upcoming week’s economic reports will include data on producer and consumer price inflation, critical for predicting the direction of yields. Rising Treasury yields could impact investor interest in high-risk assets, tightening financial conditions. Stocks declined when 10-year yields hit 5% in late 2023, with concerns that yields above 4% could challenge the stock market in 2024.



Read more at Investing.com: Jobs report fuels Treasury yield surge as markets brace for 5% threshold By Reuters