U.S. Treasury prices declined Monday, pushing the benchmark 10-year yield to 4 percent. The most impressive job growth in over three years, combined with improvements in the service sector led investors, anxious over economic weakness, away from the safety haven of government debt.
Even more pessimistic analysts have been increasingly more confident in the U.S. economic recovery of late as improvement in service and jobs solidify the direction economists have been pointing in for month. This is primarily the result of improved job reports which up until now were the primary reason economists argued against data indicating economic growth. The March payrolls data, released on Friday led bond higher as it seemed inevitable that the Federal Reserve would soon implement tighter monetary policies as unemployment continues to improve.
162,000 jobs were created in March indicating that the labor market has finally begun heading the right direction, pushing stocks higher across the board. Some economists believe that the growing confidence in the ability for the economy to maintain a recovery at this point may have the Fed considering pushing up rates sooner rather than later. In the last two recessions; however, rates stayed low for roughly a year.
The benchmark 10-year note slipped 16/32, with yield hitting 4 percent US10YT=RR, its highest point since June when it hit 4.01 percent.
The 30-year bond US30YT=RR declined 17/32, with yield at 4.84 percent from 4.80 percent at the close of the session on Friday.
Short-dated Treasuries were also down, maintaining the 2.83 percentage point distance between two- and 10-year yields.
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