Source: US Dept. of Treasury End of Day
• Rates rose last week with the 2-year Treasury note increasing by nine basis points to 4.18% while the 5-year Treasury note increased by 12 basis points to 4.25%.
• June payrolls increased by just 57 thousand, well below the expected 115 thousand, while downward revisions to prior months reinforced signs that hiring momentum is losing steam.
• The softer employment data reduces pressure on the Fed to tighten policy, prompting markets to scale back expectations for additional rate hikes.
• Although unemployment dipped to 4.2%, the decline was driven by a shrinking labor force rather than stronger job creation, pointing to weaker underlying labor market conditions.
• With inflation still above target but labor market strength fading, the Fed appears positioned to remain on hold for an extended period as the next policy move becomes increasingly uncertain.
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