The U.S. 10-Year Treasury yield (TNX) climbed to 4.759%, up 7 basis points, following a robust December nonfarm payrolls report, according to Morgan Stanley's latest Global Macro Commentary. The U.S. labor market showed unexpected strength with nonfarm payrolls increasing by 256,000, surpassing the consensus estimate of 165,000. This strong employment data, coupled with a drop in the unemployment rate to 4.1%, has led market participants to price out near-term Federal Reserve rate cuts, pushing the next anticipated 25 basis point cut to October 2025. "The data should significantly reduce concerns about downside risks in the labor market," Morgan Stanley analysts noted, emphasizing the resilience of the U.S. economy. The rise in yields reflects a broader bear-steepening trend in the U.S. Treasury curve, as inflation expectations also surged, with the University of Michigan's 1-year inflation expectations rising to 3.3% y/y, the highest since 2008.