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Jobs Report Leaves Bond Yields Steady -- WSJ

The Wall Street Journal · 01/06/2023 08:39

By Matt Grossman

Government-bond yields were little changed Friday morning after fresh monthly labor-market data showed that hiring was slightly stronger than expected in December, while wage gains were slightly weaker.

Traders are focused on whether the figures might persuade the Federal Reserve to keep up the tempo of its interest-rate increases as it tries to fight inflation, or whether the central bank may continue to ease away from aggressive rate hikes.

The yield on the benchmark 10-year Treasury note climbed to 3.727%, from 3.72% on Thursday, according to Tradeweb. The two-year Treasury yield, which more closely reflects nearer-term Fed policy expectations, rose to 4.454%, from 4.451% on Thursday. Yields rise as bond prices fall.

The Fed's next policy decision is expected on Feb. 1, when most traders are expecting that the central bank will decide between raising interest rates by another half of a percentage point or slowing down to a quarter-point move.

Last month, the Fed's half-point rate hike marked a slowdown from its campaign of four straight 0.75-percentage-point rate increases at meetings last year. But now, with the Fed's target rate sitting at between 4.25% and 4.5%, central bankers and traders alike have projected that the Fed's target rate is only a few rate increases away from reaching its peak.

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(END) Dow Jones Newswires

January 06, 2023 08:39 ET (13:39 GMT)

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