Treasury Yields Rebound as Strong Services PMI Data Complicates Fed Outlook

The US Treasury yields rebounded on Monday as the Services PMI data came in stronger than expected, indicating resilience in the US economy and prompting investors to adjust their expectations for Federal Reserve policy.

The Institute for Supply Management's Services PMI for January exceeded consensus forecasts, signaling that the services sector continues to expand at a solid pace. This robust reading reduced concerns about an imminent economic slowdown and led to a sell-off in government bonds, pushing yields higher.

As of the latest trading session, the yield on the benchmark 10-year Treasury note rose to approximately 4.2%, up from its recent lows. The 2-year yield also climbed, reflecting diminished bets on aggressive rate cuts in the near term.