162,000 JOBS IN AUGUST TRIPLES THE FORECAST, AND BOND YIELDS JUMP
Economists polled by Dow Jones expected 53,000 jobs. The beat was three times that, and with inflation still above the Fed's 2% target, traders flipped toward a hike instead of a cut.
🔴 162,000 jobs in August. Wall Street was looking for 53,000.
The bond market moved fast.
CNBC reports the 2-year Treasury yield, the maturity most tied to Federal Reserve decisions, rose more than 7 basis points Friday to 4.425%. That is its highest level since January 2025.
The 10-year note, the benchmark that sets the tone for mortgages, auto loans and credit card debt, was up nearly 4 basis points at 4.802%. The 30-year was little changed at 5.263%.
Why it matters: annual price growth remains above the Fed's 2% target. A labor market this strong plus sticky inflation gives the central bank room to move higher rather than lower.
Traders repriced immediately. The probability of a quarter-point hike at the Sept. 15-16 meeting rose to 58%, about 9 percentage points above where it sat a day earlier, according to CME Group's FedWatch tool.
"Fed officials have characterized the employment markets as stable but today's stellar jobs report shows hiring is surprisingly robust given the high level of energy prices and the ongoing affordability crisis," Chris Rupkey, chief economist at FWDBONDS, told CNBC. "The only fear is the Fed itself if it thinks economic demand is hot enough to need a rate hike in a couple of weeks."
Yields had actually slipped on Thursday, with the 10-year down more than 2 basis points. One day of data undid it.
Next week's inflation print is the last big signal before the decision.
Do you think the Fed hikes in September?
#Treasuries #FederalReserve #JobsReport #InterestRates #causeanuproar
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