The 10-year Treasury yield is up by 5 bps after initial jobless claims fell by 33,000 for the week ended September 13, the largest weekly fall in almost four years. In addition, continuing jobless claims of 1.92 million were below the consensus estimate of 1.95 million, easing fears of a labor market slowdown.
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Forget margin or options. Here's how the pros trade QQQThe 10-year Treasury yield sank lower yesterday after the Fed announced a 25 bps rate cut, with Fed Chair Jerome Powell citing labor market weakness. However, the yield gradually recovered after Powell characterized the action as a “risk management cut.”
10-Year Treasury Yield Rises on Labor Market Optimism
The 10-year Treasury yield is largely based on long-term expectations of economic growth and inflation, with falling initial jobless claims leading to higher economic sentiment.
The move higher reflects investors pricing in a more resilient labor market, which reduces the urgency for aggressive rate cuts. While the Fed controls short-term borrowing costs through the federal funds rate, the 10-year Treasury yield is moved by expectations. Stronger job data suggests the economy may be in a better position than previously thought.
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