US Treasury bonds fell on Monday as recession fears grew following a slew of key economic data released last week.
At 4:10 a.m. ET, output on 10 year treasury fell more than four basis points to 3.7547%. 2 year treasury The yield last stood at 3.7807% after falling more than nine basis points. The yield on the 10-year and 2-year Treasury notes fell to levels not seen in more than a year on Monday.
Yields and prices move in opposite directions. One basis point equals 0.01%.
On Friday, July Nonfarm Payrolls Report showed that job growth for the month totaled just 114,000, below the Dow Jones estimate of 185,000 as well as the revised June figure of 179,000. The jobs report also showed that the employment rate unexpectedly rose to 4.3%, the highest since October 2021.
Data showing the labor market is tightening has fueled fears of a recession. That comes after the Fed left interest rates unchanged earlier this week and hinted at a rate cut in September. But Many investors have since questioned Should the central bank cut interest rates now to prevent a recession?
Markets are now pricing in a growing likelihood of a 50 basis point rate cut when the Fed meets in September, CME Group’s FedWatch Tool showed.
Investors will be watching comments from Fed officials next week for clues on the outlook for economic and monetary policy. The ISM Services PMI, which tracks the performance of service companies, is also due on Monday and is expected to rise to 50.9 in July from 48.8 in June.
