Sharp Decline in Treasury Yields Following Disappointing Jobs Report

The US Treasury yields experienced a significant drop this Friday, triggered by the Labor Department's latest report which revealed only 73,000 nonfarm jobs were added in July. This figure starkly contrasts with the 106,000 jobs economists had anticipated, signaling potential economic slowdown concerns.

Policy Makers Express Concerns Over Economic Risks

Amid these developments, policymakers have been vocal about the increasing downside risks. Federal Reserve Governor Christopher Waller highlighted the danger of "falling behind the curve" should the labor market conditions continue to worsen. This latest jobs data could play a pivotal role in shaping the Fed's decisions in the upcoming September meeting.

Bond Market Reacts: A Closer Look at the Numbers

The immediate reaction in the bond market was palpable, with the 2-year Treasury yield dropping 13.8 basis points to 3.81% by 8:35 am ET. This decline spearheaded a broader bond rally, as the 10-year yield fell 5.5 basis points to 4.31%, and the 30-year yield saw a slight decrease of 1.5 basis points to 4.87%.