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U.S. Bond Yields Rise As Surge In Job Creation Leaves Mid-Year Rate Rise On The Table

The US labour market showed no signs of cooling at the start of the year, despite recent evidence that suggested the economy moved down a gear during the winter months. Employment once again grew more than expected in January and wage growth picked up.

The job market data leave the door open for a first hike in interest rates in the summer, causing a further upturn in Treasury yields as the prospect of rate hikes becomes an increasing reality. However, the FOMC are not due to consider policy until their next meeting on 17-18 March.

Cooling economy

The upbeat jobs data follow news that the rate of economic growth almost halved in the fourth quarter of last year, a slowdown which was predicted by business surveys and which also points to the modest pace of expansion continuing into the New Year. Markit's January PMI surveys showed the weakest rise in… Read More …