Key facts
- Treasury yields retreated from recent highs.
- Strong labor market data was released.
- The data supports expectations of a Federal Reserve rate hike.
- Investors are reassessing Federal Reserve policy.
Treasury yields, which had been showing signs of paring back previous gains, experienced a reversal as key labor market data was released. The Job Openings and Labor Turnover Survey (JOLTS) report, the first of three significant labor-market indicators this week, came in stronger than anticipated. This data has reinforced market wagers that the Federal Reserve's subsequent policy action will be an interest rate increase, rather than a cut. The resilience suggested by the labor data is prompting investors to re-evaluate their expectations for the Fed's monetary policy path.