The US 10-year Treasury yield falls below 4.15%, job data sparks concerns of economic slowdown

Source: BlockMedia Original Title: [New York Bonds] US 10-Year Treasury Yield Falls Below 4.15%…Concerns Over Slowing Employment Rise Original Link: U.S. Treasury yields declined following shocks to employment indicators. The market is closely watching signs of slowing employment but remains cautious about the Fed’s short-term rate cut prospects.

On the 16th(local time), the US 10-year Treasury yield dropped 0.031 percentage points to 4.147%. This is a decrease from the previous day’s closing rate of 4.178%, continuing a recent trend of steady downward stabilization.

This decline is attributed to the November employment report from the U.S. Department of Labor, which showed the unemployment rate rising above expectations. Non-farm employment increased by 64,000 last month, surpassing market expectations of(50,000), but the unemployment rate rose to 4.6% from(4.4%) the previous month, indicating signs of a cooling labor market.

However, experts are cautious about the reliability of these figures. William Campanella, macro strategist at FHN Financial, stated, “This data is less reliable due to the government shutdown,” and emphasized, “November figures should be viewed with caution due to significant technical errors.” In fact, the October employment data did not include key figures like the unemployment rate due to a 43-day federal government shutdown.

The short-term 2-year Treasury yield also fell to 3.485% today. This reflects market expectations of the Fed’s policy rate, indicating a slight anticipation of an early rate cut. However, the Fed signaled during last week’s meeting that it would hold rates steady, stating that “additional confirmation of labor market and inflation trends is needed,” making an immediate rate cut unlikely.

Market expectations for the Fed’s rate decisions also reflect this outlook. Currently, the federal funds futures(FFR) market prices in a 24% chance of a rate cut at the January Fed meeting, with the likelihood of a cut pushed back to after the April meeting.

Meanwhile, attention is also focused on who the President might nominate as the next Fed Chair. Several former Fed officials and economic advisors are being considered as candidates, and current Fed officials are also reportedly among the interviewees.

Market participants are watching the upcoming release of the November Consumer Price Index(CPI) on Thursday, which is expected to be a key factor in determining the Fed’s future rate policy direction.