Treasury yields rise after jobless claims report

Treasury yields rise after jobless claims report

US Treasury bond yields rose on Friday as investors digested the previous day’s data release that showed jobless claims fell below expectations.

The benchmark 10-year Treasury yield rose 4 basis points to 2.926% at 8:30 am ET, while the 30-year Treasury yield rose about 3 basis points to 3.1728%. Yields move inversely with prices and one basis point equals 0.01%.

The yield on the short-dated 2-year Treasury bills was also around 2 basis points higher at 3.255%.

The rise in yields was a shift from the previous session as yields cooled as markets pondered the Federal Reserve’s July meeting minutes release. The Fed indicated it will continue raising rates until inflation slows significantly, although the central bank may soon slow its pace of tightening.

Thursday also showed a further slowdown in home demand, with home sales falling almost 6% in July as the housing market enters a contraction.

Jobless claims for the week ended August 13 were 250,000, down 2,000 from the previous week and below the Dow Jones estimate of 260,000.

Markets and policymakers are watching the job market closely as rate hikes aim to cool the job market and 40 years of high inflation. According to minutes released on Wednesday, Fed policymakers said bringing inflation down was their top priority, even if it means a drop in hiring.

The Fed is considering another big rate hike in September, St. Louis Fed President James Bullard said Thursday, adding that he could not say for sure whether inflation has peaked.

“We should continue to move briskly towards a level in interest rates that will put significant downward pressure on inflation…I don’t really see why you want to delay rate hikes until next year,” Bullard said in an interview with The Wall Street Journal.

Data releases on Baker Hughes rig counts are due Friday.