Non-farm payrolls exceed expectations! US bond yields across the board jump by 5 basis points, and rate cut expectations have retreated to less than twice this year.

Notice that on Friday, the bond market fell, pushing up the yields on all maturities of US Treasury bonds by at least 5 basis points. The benchmark 10-year US Treasury yield rose by 7 basis points to 4.46%, while the two-year US Treasury yield, which is most sensitive to Federal Reserve monetary policy, also climbed by 7 basis points to 3.99%. The interest rate swap market indicates that traders currently estimate a 70% probability of a 25 basis point rate cut before September. The pricing for rate cuts for the entire year is now less than twice. According to the latest data released by the US Bureau of Labor Statistics on Friday, the non-farm payroll employment increased by 139,000 in the previous month, the lowest since February, while the previous two months were revised downward by a total of 95,000. The unemployment rate remained steady at 4.2%, while wage growth accelerated. The non-farm payroll employment of 139,000 significantly exceeded the general expectation of around 126,000 to 130,000, while the unemployment rate was in line with economists' expectations. Jeffrey Rosenberg, portfolio manager at BlackRock, said in an interview, "We can see that the bond market is slightly adjusting its expectations for Federal Reserve policy," "The key information is that the labor market is slowing down but still remains strong." Federal Reserve rate cut market pricing Federal Reserve policymakers have stated that in the face of balancing high inflation and the risks of economic slowdown, they need more data support before considering a rate cut. Officials have said it may take several months to clarify the impact of major policy adjustments (especially in trade policy) on the economy. This week's data paints a mixed picture of the job market amid the uncertainty of the Trump administration's trade war. Private sector employment data shows that the pace of hiring slowed to a two-year low in May, while job vacancies unexpectedly increased in April. Ed Al-Hussein, rate strategist at Columbia Threadneedle Investments, said regarding the Friday report, "These data will not change the current Fed policy," "Some bearish positions betting on a rate cut this summer might be unwound." Wall Street's predictions for the extent of Fed rate cuts this year range from zero to 100 basis points. Most major banks predict only one rate cut, likely in September or December. Traders are still betting that policymakers will hold steady at the June meeting, with the earliest potential rate cut in September or October. Lindsay Rosner, head of multi-sector fixed income investments at Goldman Sachs Asset Management, stated, "We expect the Fed to maintain rates at this month's meeting," "Labor market data needs to soften further for the Fed to continue the easing cycle." Strategist Cameron Cris said, "Although the initial reaction in the bond market was mainly focused on data exceeding expectations (possibly with marginally positive headline news), overall, these data did not truly change our understanding of the labor market." Meanwhile, the Bloomberg Dollar Index rose to a daily high after the report was released, before narrowing its gains. The index has fallen by 0.4% accumulated this week, and the foreign exchange market is increasingly focusing on economic data performance.