US bond volatility hits highest level since VJ Day, market concerned about US finances and uneasy about non-farm payroll.

Due to the uncertainty of the US government's fiscal situation and market concerns that Friday's non-farm data could impact bets on a Federal Reserve rate cut, the volatility in the US bond market has intensified. According to an indicator from the Intercontinental Exchange, the implied volatility of US Treasury bonds has surged by 12.12 points over the past three days, marking the largest consecutive increase since April 2nd when Trump announced retaliatory tariffs. Unless tariff revenues continue, the Trump administration's spending and tax cuts are expected to worsen the US fiscal situation. In addition, Friday's non-farm payroll report is closely watched by the market for clues on Federal Reserve policy, as officials will soon enter a blackout period before the September 17th rate decision. Trump's efforts to exert greater control over the Federal Reserve have also increased market unease, including attempts to dismiss board member Lisa Cook. J.P. Morgan strategists say that these concerns are reflecting more in rates, gold futures, and stocks than in currencies.