U.S. Treasury yields were higher on Friday as investors looked ahead to key labor market figures and assessed the outlook for interest rates.
At 6:11 a.m. ET, the yield on the 10-year Treasury was 2 basis points higher at 3.88%. The 2-year Treasury yield was last up by over 2 basis points at 4.231%.
Yields and prices have an inverted relationship and one basis point equals 0.01%.
Investors awaited the January jobs report due on Friday and considered the path ahead for interest rates after the Federal Reserve’s latest monetary policy decision and guidance was issued earlier in the week.
Economists surveyed by Dow Jones are expecting the jobs report to show that payrolls increased by 185,000 in the month and the unemployment rate to have risen to 3.8%.
In December, payrolls grew by 216,000, which was far more than previously expected, and the unemployment rate came in at 3.7%.
The U.S. Labor Department’s jobs report comes after ADP’s private payrolls report, which was published earlier in the week, slowed more sharply than expected in January. Companies added 107,000 workers in the month, down from a revised 158,000 in December.
The fresh data could provide hints about the impact of elevated interest rates and indicate whether they are working to slow the economy, including the labor market. That comes as uncertainty around the outlook for interest rates, especially regarding a timeline for rate cuts, remains high.
The Fed earlier this week said it would keep rates unchanged for now, but Fed Chairman Jerome Powell indicated that rate cuts could come later this year. However, he noted that a March rate cut — which some investors had been hoping for amid concerns about elevated rates leading to a recession — is unlikely.
