Treasury Yields Pull Back From 16-Year Highs

U.S. Treasury yields were little changed on Thursday, after pulling back from recent multi-year highs in the previous session, as investors waited for more economic data.

The yield on the 10-year Treasury was down more than 1 basis point at 4.719%. It had risen to as high as 4.884% on Wednesday, hitting a 16-year high. The yield on the 2-year Treasury was 2 basis points lower at 5.029%.

Yields and prices move in opposite directions and one basis point equals 0.01%. Traders are looking ahead to Friday’s U.S. jobs report. Economists expect the economy to add 170,000 jobs in September. That would be down slightly from the growth of 187,000 payrolls seen in August.

Early indications have shown that private job growth slowed significantly in September. Just 89,000 jobs were added throughout the month, down from 180,000 in August. The September figure was also far below the 160,000 economists previously polled had expected.

Many investors took that as a sign of an easing labormarket, fueling optimism that the Federal Reserve might soon halt its cycle of raising interest rates. The central bank started increasing rates in March 2022 to temper the economy and reduce inflation. Elevated rates have been a significant concern for many investors, with worries about their potential to trigger a recession.

Fed officials recently suggested that interest rates will likely stay higher for longer than previously expected and that there is a possibility of a further rate hike.