Treasury yields surge after blockbuster U.S. July jobs data

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Treasury yields jumped sharply Friday after a much stronger than expected US July jobs report stoked expectations the Federal Reserve will continue to aggressively raise interest rates to contain inflation.

What yields are doing
What’s driving the market
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The US economy added 528,000 new jobs in July and the unemployment rate fell to pre-pandemic levels, though the robust report could add to inflation concerns and push interest rates even higher. Economists polled by The Wall Street Journal had forecast 258,000 new jobs.

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The unemployment rate slipped to 3.5% from 3.6%, the government said Fridaymatching the lowest rate since the late 1960s, while average hourly earnings rose 0.5%.

Fed-funds futures traders priced in a 67.5% probability of a 75 basis point rate increase in September, up from 34% on Thursday.

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Meanwhile, geopolitical tensions remain an undercurrent for markets. China conducted “precision missile strikes” Thursday in waters off Taiwan’s coasts as part of military exercises that have raised tensions in the region to their highest level in decades following a visit by US House Speaker Nancy Pelosi to the island.

What analysts say

Hear from Ray Dalio at the Best New Ideas in Money Festival on Sept. 21/22 in New York. The hedge-fund pioneer has strong views on where the economy is headed.

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Credit: www.marketwatch.com /

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