A tough start to the year for bond traders was made worse, as critical US employment data showed that the labor market was active, with little pressure on the Federal Reserve to lower interest rates.
US Treasury yields have risen, and traders' expectations for the Federal Reserve's first rate cut have been delayed. According to previously released data, US non-farm payrolls recorded the biggest increase in nearly a year in March, and the unemployment rate remained stable.
As the latest data dispels hopes that the Federal Reserve will soon take action to cut interest rates, US Treasury yields are approaching their highest level since 2024, and the yield on the benchmark 10-year Treasury jumped 8 basis points to around 4.39%.
US Treasury bond futures now show that the first rate cut by the Federal Reserve will not occur until September, and the probability of cutting interest rates in June has dropped to around 52%. Traders now expect to cut interest rates by only about 67 basis points for the full year of 2024, which is lower than the 25 basis point rate cut three times each time suggested by Fed officials.
