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US Treasury yields jumped to an eight-month high on Tuesday, after strong jobs and services data prompted investors to bet the Federal Reserve is likely to cut interest rates just once this year.
The yield on 10-year US government bonds – a global benchmark for fixed-income assets – rose 0.08 percentage point to 4.7 percent, its highest level since April last year.
These moves came in the wake of a series of data that indicated that the world's largest economy remains in good health, casting further doubts on the issue of interest rate cuts by the Federal Reserve.
The ISM's non-manufacturing PMI, a measure of services activity, rose to 54.1 in December, higher than economists' expectations of 53.3. A reading above 50 indicates expansion.
Separate data showed there were 8.1 million job openings in November, above expectations of 7.7 million job openings, indicating unexpectedly strong demand for American workers.
Investors have been watching measures of business activity and the health of the labor market closely for clues about the extent and speed of the recovery. Federal Reserve He will choose to lower interest rates.
In the wake of Tuesday's data, investors were betting that the Fed would cut interest rates by a quarter of a percentage point by July, with a roughly 35 percent chance of making another such move by the end of the year. Earlier in the day, the odds of a second quarter-point cut were nearly 70 percent.
The Fed cut interest rates for the first time from their highest levels in 23 years in September, and made two additional cuts before the end of 2024. However, in December, policymakers He pointed to a slowdown in the pace of easing In 2025, underscoring ongoing concerns about inflation.
US stocks gave up earlier gains following the release of November jobs data, with the S&P 500 and tech-heavy Nasdaq composite indexes down 0.4 per cent and 0.9 per cent respectively in late morning trading in New York.
