US Treasury yields climbed on Friday after new jobs data showed stronger hiring than expected. The 10-year yield rose over 9 basis points to 4.486%, while the 2-year increased 11 basis points to 4.034%. The 30-year yield moved up more than 5 basis points to 4.941%. Higher yields typically suggest investors anticipate tighter monetary policy, potentially due to inflation risks or stronger economic activity.
Nonfarm payrolls rose by 139,000 jobs in May, surpassing the consensus forecast of 125,000 from economists polled by Dow Jones, according to data released Friday morning. The unemployment rate remained steady at 4.2%.
This stronger-than-expected jobs report could influence investor sentiment around economic growth and monetary policy, factors that directly impact US Treasury yields. In particular, hiring trends offer clues as to whether companies are adjusting their workforce strategies in response to President Donald Trump’s fluctuating tariff policies.
A positive surprise in job creation may also support the Federal Reserve’s current stance of holding interest rates steady — rates which directly affect movements in US Treasury yields. Fed funds futures are already pricing in a near 100% chance that the central bank will leave rates unchanged at its June meeting, according to the CME FedWatch tool.
“With the Fed laser-focused on managing the risks to the inflation side of its mandate, today’s stronger-than-expected jobs report will do little to alter its patient approach,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management.