Traders Pull Back on Fed Hike Bets After Soft US Jobs Data

Bond traders have reassessed their expectations for Federal Reserve interest-rate hikes following weaker-than-expected US labor market data. The September employment report revealed a lower-than-estimated number of jobs added, which has tempered hopes for a rate hike this month or in December.

The soft jobs numbers caused yields on two-year Treasury notes to briefly dip by as much as 10 basis points before rebounding and ending the day more than four basis points higher at 4.84% in late New York trading.

The outlook for three hikes by the end of next year to combat inflation remains intact, despite the slight pullback on rate hike bets.