10-Year Treasury Yield Rises as Upbeat Jobs Data Dulls Rate Cut Hopes

The 10-year Treasury yield rose 3.2 bps to 4.345% on Friday following a strong jobs report from the Bureau of Labor Statistics.

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In March, the U.S. economy added 178,000 jobs, above the consensus estimate of 65,000 and improving from a revised loss of 133,000 jobs in February. With a stronger job market, the Fed is less incentivized to cut rates and stimulate employment.

10-Year Treasury Yield Climbs as Rate Cut Bets Fade

The 10-year Treasury yield moved higher following the jobs report, reflecting shifting expectations around interest rates. The yield typically rises when investors expect the Fed to keep rates elevated for longer, and falls when expectations shift toward future rate cuts. The Fed is expected, with 69.5% odds, to hold rates steady by year-end, according to the CME FedWatch tool.

Yields have climbed higher over the past month as the risk of higher inflation from elevated gas prices has pushed investors to price in fewer rate cuts and a longer period of elevated interest rates.