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Weak US Jobs Data Fuels Fed Rate Hike Delay Hopes, Shakes Global Markets
M
Moneycontrol•02-10-2026, 21:29
Weak US Jobs Data Fuels Fed Rate Hike Delay Hopes, Shakes Global Markets
- •Bond traders now anticipate a later start to further Federal Reserve interest-rate hikes following weaker-than-expected September US employment data.
- •The US added fewer jobs than economists estimated, eroding expectations for a rate hike this month or in December, with interest-rate swaps showing a reduced chance of a Fed hike in October.
- •Yields on two-year Treasury notes briefly fell, while benchmark 10-year yields, which hit their highest level since 2002 this week, were down after the Bureau of Labor Statistics data.
- •Analysts suggest the weak jobs report gives the Fed "more cover to stay on hold" and makes an October hike unlikely, despite ongoing inflation concerns.
- •The data also led traders to pare expectations for interest-rate hikes in European and UK markets, reflecting a broader impact on global monetary policy outlooks.
Key Questions Answered
Bond traders priced in a later start to further Federal Reserve interest-rate hikes after September employment data showed the US added fewer jobs than economists estimated. Interest-rate swaps showed traders priced in about a 20% chance that the Fed lifts benchmark borrowing costs at its October meeting, down from nearly 30% prior to the data.
Nonfarm payrolls increased by 29,000 last month following a downward revision to the prior two months, missing all estimates in a Bloomberg survey of economists.
Benchmark 10-year yields were down about three basis points to 5.21% on Friday after hitting their highest level since 2002 earlier in the week.
