05.10.202602:30:47UTC+00Treasury Yields Ease as Fed Hike Bets Recede

The US 10-year Treasury yield eased to around 5.25% on Monday, while the 30-year yield declined toward 5.6%, as traders pared back expectations of an imminent Federal Reserve rate hike following weaker-than-anticipated US employment data. Figures released on Friday showed the US economy added just 29,000 jobs in September, far below the consensus forecast of 90,000, while August’s gain was revised down to 133,000. The unemployment rate rose to 4.2%, and annual wage growth unexpectedly slowed to 3.0%, its weakest pace since May 2021.

In response, markets are now pricing in nearly an 80% probability that the Fed will leave policy unchanged this month, while expectations for a December rate increase remain close to 69%. Even so, Treasury yields are still hovering near their highest levels in more than two decades, reflecting lingering concerns about persistent energy-driven inflation, heightened US fiscal risks, and increased debt issuance associated with investments in artificial intelligence.