Treasury yields edge higher as investors await key jobs data

U.S. Treasury yields edged higher Friday as investors await a key jobs report that could provide clues about the state of the economy and inform the Federal Reserve’s monetary policy decisions ahead.

At 4:17 a.m. ET, the yield on the 10-year Treasury was up over two basis points at 4.1122%. The 2-year Treasury yield was last trading less than one basis point higher at 4.8660%.

Yields and prices have an inverted relationship. One basis point equals 0.01%.

Investors are watching August’s payroll report, due to be released at 8.30 a.m. ET., for fresh clues about whether the labor market is cooling. Signs of an economic slowdown could mean the Fed is less likely to continue hiking interest rates.

Economists surveyed by Dow Jones are expecting non-farm payrolls to have risen by 170,000. This would be a slowdown of job growth compared to July, when non-farm payrolls expanded by 187,000.

The latest unemployment rate, as well as average hourly earnings figures, will be released alongside non-farm payrolls.

Uncertainty about the Fed’s policy path lingers after Chairman Jerome Powell suggested last week that further rate hikes may be needed to curb inflation, which he suggested remains too high.

Many market participants had thought July’s rate hike would mark the end of the central bank’s rate-hiking campaign, or at least be the last increase before a prolonged pause.

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