What was the US jobs report for January?

The January US jobs report showed 130,000 roles added, which was double the median forecast and indicated a robust economy.

How did the jobs report affect Federal Reserve rate cut expectations?

The strong jobs report led traders to pare back bets on Federal Reserve rate cuts, with money markets now expecting the first cut in July instead of June.

What was the impact on Treasury yields?

Short-dated Treasuries were hit the hardest, with two-year yields rising around six basis points to approximately 3.51%.

Home / Business and Economy / US Jobs Surge Stuns Markets, Fed Rate Cut Bets Falter

US Jobs Surge Stuns Markets, Fed Rate Cut Bets Falter

12 Feb

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Summary

January jobs report shows 130,000 roles added, doubling forecasts.
Traders now expect the first Fed rate cut in July, not June.
US economic strength overshadows calls for lower borrowing costs.

US Jobs Surge Stuns Markets, Fed Rate Cut Bets Falter

The latest US monthly employment report revealed a significant surge in job creation, with 130,000 roles added in January. This figure exceeded median forecasts by a substantial margin, signaling a remarkably robust economy.

This unexpected strength in the labor market has directly impacted financial markets, leading traders to reduce their expectations for imminent Federal Reserve rate cuts. Short-dated Treasuries experienced notable declines, with two-year yields rising. Money markets have recalibrated, now pricing in the Fed's next rate cut for July instead of June.