US Treasury yields fell on Wednesday following the release of July labor market data that pointed to a weakening economy, prompting investors to anticipate a near-term interest rate reduction by the Federal Reserve. The JOLTS report revealed a sharper-than-expected decline in job openings and a rise in layoffs, surpassing median forecasts in analyst surveys. As a result, market-based indicators now reflect a 95% probability of a 25-basis-point rate cut during the current month. Additionally, expectations have grown for at least two additional reductions in borrowing costs before the end of the year. The data reinforced concerns that economic momentum is cooling, influencing traders’ positioning across fixed-income markets.
— news from Bloomberg.com
— News Original —
Treasuries Rebound After Job Openings Data Confirm Slowdown
Treasury yields declined Wednesday after a weaker-than-expected report on hiring and firing by US employers in July caused traders to almost fully price in a Federal Reserve interest-rate cut this month.
Contracts for predicting Fed moves priced in about 95% of a quarter-point rate cut this month and ramped up wagers on at least two cuts by year end after the JOLTS report showed that job openings declined more than estimated while layoffs exceeded the median survey response.