The yield on the 10-year US Treasury note sank to the 4.15% level, retreating further from the 15-year high of 4.34% touched on August 21st as cooler economic data suggested that the US labor market may be starting to feel the impact of higher interest rates, raising demand for bonds in the secondary market. Figures from the JOLTs showed that 8.8 million jobs were added to the US economy in July, a 28-month low, remaining above historical averages but missing market forecasts of 9.5 million. The results aligned with Fed Chair Powell’s Jackson Hole statements that there is uncertainty on the duration of policy transmission lags, driving policymakers to heed overtightening risks. Still, Powell also stated that another rate hike could be warranted should above-trend growth patterns persist, after underscoring the priority to bring inflation down to the 2% level. The remarks drove money markets to price in another 25bps rate hike in November following a hold next month.
