Treasury Yields Dip Ahead of June Jobs Report as Markets Watch Trump’s Spending Bill
U.S. Treasury yields edged lower on Thursday morning as investors awaited the release of the June nonfarm payrolls report, a crucial indicator of the labor market’s health. The benchmark 10-year yield dropped 4 basis points to 4.253%, while the 30-year yield fell to 4.781%. The 2-year yield also declined to 3.772%. These shifts reflect cautious investor sentiment amid uncertainty over employment trends and fiscal policy developments.
The labor market data, expected later on Thursday, is seen as a key metric for gauging the Federal Reserve’s next move on interest rates. Economists surveyed by Dow Jones anticipate a slowdown in job creation, projecting 110,000 new jobs in June, down from 139,000 in May. The unemployment rate is also forecast to tick up to 4.3% from 4.2%, signaling a potential cooling in the economy.
Concerns about weakening job growth were reinforced by Wednesday’s ADP payroll report, which showed that private sector hiring dropped by 33,000 positions last month. This data point has heightened investor uncertainty and contributed to the dip in Treasury yields, which typically move inversely to bond prices as traders shift toward safer assets.
Adding to the market’s cautious tone is President Donald Trump’s controversial spending bill, dubbed “one big beautiful bill.” The $3.3 trillion measure passed the Senate earlier in the week and is now under scrutiny in the House, where it faces resistance from some Republicans. If enacted, the bill is expected to significantly increase the federal deficit over the next decade, fueling debate about long-term fiscal sustainability.
On the international trade front, Trump announced a new agreement with Vietnam via Truth Social. The deal imposes a 20% tariff on imports from Vietnam and a 40% levy on goods that are rerouted through Vietnam from other countries before entering the U.S. The move marks a significant escalation in trade enforcement and could impact global supply chains, further influencing investor sentiment.
Source: CNBC