Treasuries Rally as Soft Jobs Data Trims Fed Rate-Hike Bets

US Treasuries rallied after data showed employers unexpectedly cut jobs in July, suggesting labor market challenges that could impact the Federal Reserve’s willingness to raise interest rates.

The yield on two-year US Treasuries, which are sensitive to near-term moves in Fed monetary policy, fell as much as nine basis points on Friday to 4.15% as traders cut bets on interest-rate hikes in the coming months.

The moves were pared later in the New York trading session as oil rose, though the two-year yield remained about four basis points lower on the day near 4.20%.

We get reaction from Tom Tzitzouris, Head of Fixed Income Research at Baird Strategas. (Source: Bloomberg)