05.06.202612:44:20UTC+00Treasury Yields Jump After Jobs Report

The yield on the US 10-year Treasury note climbed about 6 bps to 4.54% on Friday after a stronger-than-expected jobs report reinforced expectations that the Federal Reserve may need to raise interest rates again. Markets are now almost fully pricing in a quarter-point hike by year-end.

The US economy added 172,000 jobs in May, significantly above the consensus forecast of 85,000, while employment figures for March and April were revised higher. The unemployment rate held steady at 4.3%, and average hourly earnings rose 0.3% month-on-month, in line with expectations.

The data underscored the resilience of the labour market, with job gains appearing broadly based across sectors. Against a backdrop of persistent inflationary pressures and price growth still running above the Fed’s target, the report strengthened the case for further monetary tightening later this year.

Meanwhile, the 2-year Treasury yield, which is more sensitive to shifts in interest rate expectations, rose about 10 bps to 4.16%.