Friday’s raft of U.S. economic data produced a cascading drop in rates across the Treasury market, pushing the policy-sensitive 2-year and benchmark 10-year yields to their lowest levels of the new year.
The 2-year yield
TMUBMUSD02Y,
4.299%,
which moves in coordination with expectations around the path of Federal Reserve policy, plummeted 15 basis points to below 4.3% after December’s U.S. jobs report included signs of slowing wage growth. The 10-year rate
TMUBMUSD10Y,
3.580%
reacted about 90 minutes later, dropping below 3.6% after a barometer of U.S. business conditions at service-oriented companies sank last month. Those moves were then followed by the 30-year rate
TMUBMUSD30Y,
3.707%
plummeting to around 3.7%.
Taken together, Friday’s data gave the financial market reasons to hope that disinflationary forces are on the horizon…
