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2026-04-04 00:48:14
U.S. Treasuries fell in a shortened trading session after the Labor Department released stronger-than-expected March jobs data (including a larger-than-expected increase in non-farm payrolls and a decrease in the unemployment rate). Short-term Treasuries led the decline (yields rose), closing up about 4 basis points, as short-term interest rate contracts priced in a lower probability of a Federal Reserve rate cut this year or next. Overnight index swaps (OIS) contracts, which are linked to future Fed rate decisions, virtually eliminated all bets on a rate cut this year, whereas before the data release, the market had priced in about 4 basis points of easing; for 2027, the market still priced in about 22 basis points of easing, down about 6 basis points from Thursday's close. The market reaction indicates that the strong jobs data has significantly changed investors' expectations for the Fed's monetary policy direction, with the rise in short-term Treasury yields reflecting a reassessment of the short-term interest rate outlook.
