Strong Employment Data Pressures U.S. Bonds as Traders Lower Bets on Fed Rate Cuts

According to a report by Jinse Finance, U.S. Treasury prices fell as traders began to lower their bets on rate cuts this year following stronger-than-expected employment and wage growth data. Yields on Treasuries of all maturities rose, with short-term yields leading the way. Interest rate swaps indicate that traders estimate a roughly 70% probability of a 25 basis point rate cut in September, compared to about 90% on Thursday. Traders generally expect the Federal Reserve to keep rates unchanged at the June 17-18 meeting, with only a 10% chance of a rate cut in July. Kevin Flanagan, Head of Fixed Income Strategy at WisdomTree, stated, "The employment data rules out the possibility of rate cuts in June and July. We continue to wait and see, as the market turns its attention to whether next week's CPI can continue the trend of declining inflation, given that employment has not slowed down."