(Bloomberg) — Treasuries slipped for a second day after new jobless claims fell for a sixth week, suggesting Federal Reserve policymakers will have to contend with a resilient US labor market.<\/p>\n
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The selloff pushed Treasury yields on most tenors two to four basis points higher as of early afternoon in New York, with the benchmark 10-year\u2019s trading at 4.4%. Interest-rate swaps showed traders slightly pared bets on Fed rate cuts. They are now pricing in 42 basis points of reductions by the end of the year, with the first full cut coming by the October meeting.<\/p>\n
\u201cThe bottom line is that the Fed can\u2019t credibly cut rates with an unemployment rate of 4.1%,\u201d said George Catrambone, head of fixed income, DWS Americas. \u201cThere is a glass ceiling on how high yields can push out of their current range with a Fed that\u2019s frozen in place.\u201d<\/p>\n
Data released Thursday showed initial claims for unemployment benefits fell to 217,000 in the week ended July 19, the lowest since mid-April. The six weeks of declines is the longest such stretch since 2022.<\/p>\n
\u201cThe labor market deterioration has slowed or stopped, with the caveat the labor supply, immigration, negative data revisions are making reading the labor market data tricky,\u201d said Ed Al-Hussainy, rates strategist at Columbia Threadneedle Investment.<\/p>\n
Market expectations of rate cuts starting from late September, \u201cmay be off the table if unemployment is unchanged next week,\u201d he said.<\/p>\n
European government bonds also stumbled Thursday after the European Central Bank tempered expectations of a possible interest rate cut in September.<\/p>\n
Investors were already turning broadly more risk-on amid deals between the US and its trading partners. The European Union and the US are progressing toward an agreement that would set a 15% tariff for most imports, according to diplomats briefed on the negotiations.<\/p>\n
Another pressure point for traders is a dispute between President Donald Trump and Federal Reserve Chair Jerome Powell over construction works, which the president has criticized for cost overruns.<\/p>\n
Last week, Trump has said that he didn\u2019t plan to fire Powell before the end of his term. Trump was set for a tour later Thursday of the $2.5 billion renovation of the central bank\u2019s headquarters.<\/p>\n
\u201cThe mounting risk of the Fed being seen as acting more on a political than a fundamental level is a sizable threat to long-end rates over the medium term,\u201d Rabobank strategists wrote in a note.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — Treasuries slipped for a second day after new jobless claims fell for a sixth week, suggesting…\n","protected":false},"author":3,"featured_media":89443,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[3638,64,79,1597,4509,5005,2179,67,132,68],"class_list":{"0":"post-89442","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-bloomberg","9":"tag-business","10":"tag-economy","11":"tag-federal-reserve","12":"tag-jobless-claims","13":"tag-president-donald-trump","14":"tag-unemployment-rate","15":"tag-united-states","16":"tag-unitedstates","17":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114909948377136786","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/89442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=89442"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/89442\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/89443"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=89442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=89442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=89442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}