Bond Market Reacts as Investors Anticipate Inflation Data
The U.S. Treasury market cooled on Thursday, with the 10‑year yield falling more than two basis points to 4.023% and the 30‑year dropping under two basis points to 4.675%. Even the short‑term 2‑year note slipped slightly, ending at 3.452%. These moves suggest investors are holding their breath for a major inflation report while keeping an eye on the overall economy.
Labor Data Adds Surprise
The Department of Labor reported that new unemployment claims for the week ending February 21 rose by 4,000 to 212,000. Though higher than the previous week’s figure, it remains below the market’s expectation of 215,000. This steadiness in job numbers has unsettled both bond traders and the Federal Reserve, which had been treating the labor market as fragile.
Earlier this month, the Bureau of Labor Statistics announced that January’s job growth hit 130,000, far exceeding the 55,000 forecast by economists. That jump signals a stronger labor market than many had feared.
Market Outlook
With the January producer price index due Friday, investors are hoping for a modest rise of 0.3% in both headline and core readings—core inflation excludes food and energy prices. A cooler-than‑expected report could lift confidence in stocks, encouraging riskier investments.
