U.S. Treasury yields rose on Tuesday after economic data showed inflation in the services sector was unchecked.
this 10-Year Treasury Bond The yield climbed more than 7 basis points to 4.693%, having hit an intraday high of 4.699% earlier, the highest since April 26. 2-Year Treasury Bond The yield rose more than two basis points to 4.299%.
Yields and prices move in opposite directions. 1 basis point equals 0.01%.
Previously, the ISM services price index rose to 64.4 in December from 58.2 in November. Meanwhile, the Job Openings and Labor Turnover Survey (JOLTS) showed a higher-than-expected number of vacancies.
The combination of rising prices and massive job losses could lead traders to lower expectations for a rate cut by the Federal Reserve in 2025.
The ADP private employment report will be released on Wednesday and is expected to show 130,000 new jobs were added in December, while the Bureau of Labor Statistics is expected to release its December employment report on Friday. This will include non-farm payrolls data as well as the U.S. unemployment rate
Investors will be watching the data closely as it could influence their views on the potential outlook for monetary policy, particularly interest rates. Previously, the central bank said in December that it might reduce interest rates before its next meeting on January 28-29.
The Fed is widely expected to keep interest rates unchanged at that time, and according to the latest pricing from traders, there is about a 93% chance that interest rates will remain stable. CME Group’s Fed Watch tool.
Investors will be watching the minutes of the Federal Reserve’s December meeting to be released on Wednesday to learn more about policymakers’ thoughts and expectations for the economy.
