US Treasury Yields Climb as Jobs Report Tempers Fed Hike Bets
US 10-year Treasury yields rose to 5.281% on Friday, 2 October 2026, after September's nonfarm payrolls added a lower-than-expected 29,000 jobs.
US Yields Reverse After September Jobs Data
On Friday, 2 October 2026, US Treasury yields reversed an earlier decline, ending higher despite a weaker-than-anticipated September jobs report. The US Labor Department reported nonfarm payrolls increased by only 29,000 last month, significantly below the 90,000 economists had forecast. The unemployment rate also edged up to 4.2%, surpassing expectations of 4.1%.
August's job growth was revised downwards to 133,000 from an initial 162,000, further indicating a cooling labour market.
Market Reprices Fed Rate Expectations
Initially, investors bought Treasuries, causing yields to fall, but selling resumed later in the session. The benchmark 10-year Treasury yield climbed 4.72 basis points (bps) to 5.281% by day's end, having earlier dipped to 5.1570%. The 30-year bond yield rose 2.91 bps to 5.6321%, while the 2-year note yield increased 3.98 bps to 4.827%.
According to LSEG data, traders now assign an 80% probability that the Federal Reserve will keep rates unchanged at its October 2026 meeting, up from 74% before the jobs data.
Weekly Trends and Analyst Perspectives
Despite Friday's volatility, the 10-year Treasury yield was on track for its fifth consecutive weekly advance, increasing by 10 bps for the week. The 30-year yield also prepared for its second weekly gain, up 13.2 bps. In contrast, the 2-year yield saw its first weekly decline since mid-August, down 3.3 bps.
Molly Brooks, a US rates strategist at TD Securities, suggested the report eased concerns about a labour market re-acceleration, allowing the Federal Reserve to focus more on inflation. However, Brooks cautioned that the bond market is "definitely not out of the woods".
The continued upward pressure on US Treasury yields carries implications for Asian markets. Higher US yields can make dollar-denominated assets more attractive, potentially drawing capital away from Asian fixed income and equity markets.
This trend could also increase borrowing costs for Asian governments and corporations that issue debt in US dollars, impacting their funding strategies and investment decisions. Companies with significant US dollar liabilities may face increased interest expenses, while exporters could see currency fluctuations affect their competitiveness.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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