The latest US jobs report, revealing an addition of 256,000 jobs in December and a drop in the unemployment rate to 4.1%, has reinforced expectations of sustained economic growth. This robust labor market data has heightened the likelihood of further interest rate hikes by the Federal Reserve, prompting bond investors to remain cautious. The anticipation of higher rates has led to a bearish sentiment in the bond market, as investors demand higher returns, causing bond prices to fall and yields to rise.
The 10-year Treasury yield has climbed nearly 10 basis points, reaching 4.786%, its highest level since October 2023. This increase in yields suggests that investors are bracing for the possibility of yields hitting 5%, reflecting expectations of prolonged inflation pressures or continued economic strength. As of 09:32 on January 10, the 10-year Treasury yield stands at 4.76, up from its last close of 4.69, with an intraday high of 4.79.