U.S. Treasury yields fell during Thursday’s trading, as weak economic data raised speculation that the Federal Reserve may resume rate cuts later this year, amid anticipation of jobs data to be released tomorrow.
The yield on two-year Treasury notes, which is most sensitive to changes in monetary policy, dropped by 1.8 basis points to 3.603% at 1:21 PM Mecca time.
Meanwhile, the yield on ten-year bonds fell by 2.8 basis points to 4.147%, and the yield on 30-year bonds dropped by 1.8 basis points to 4.662%.
With the Federal Reserve’s meeting next week, investors are expecting more than a 95% chance of no rate changes, with forecasts suggesting four additional rate cuts by the end of this year, according to the CME FedWatch Tool.
This comes after data released yesterday raised concerns about a recession, as the U.S. economy contracted for the first time since 2022, shrinking by 0.3% year-on-year in Q1 2025.
Investors are awaiting the non-farm payroll report from the Bureau of Labor Statistics tomorrow, with expectations for the U.S. economy to add 133,000 jobs in April, while the unemployment rate remains steady at 4.2%
