US Yields Advance As Market In Consolidation Mode Ahead Of Fed Next Week

U.S. Treasury yields rose on Thursday, snapping a three-day decline, as investors stepped back from bond purchases and consolidated positions ahead of next week's Federal Reserve meeting, where the central bank is widely expected to deliver a third consecutive rate cut.

In the bond market, yields rise when prices fall.

In late morning trading, the benchmark 10-year yield rose 3.4 basis points to 4.092%, while the 30-year yield climbed 2.7 bps to 4.752% (US30YT=RR).

On the front end of the curve, the two-year yield, which reflects interest rate moves by the Fed, advanced 3.3 bps at 3.519% (US2YT=RR).

"We've had a little bit of a streak of lower yields since Monday and with the focus on monetary policy, it feels like rate cuts just kept getting more and more momentum," said Jim Barnes, director of fixed income at Bryn Mawr Trust in Berwyn, Pennsylvania.

"Today you just have a little bit of a giveback. The jobless claims data probably helped with that a little bit. But the market was already trading off earlier, even before the claims data even came out."

ECONOMY LOST 9,000 JOBS IN NOVEMBER: REPORT

U.S. yields, however, pared their increase after data from Revelio Labs, which develops monthly employment estimates from online employment profiles and other information, showed that the economy lost 9,000 jobs in November, a second month of decline after a drop of 9,100 estimated for October.

The report overshadowed weekly U.S. jobless claims numbers that fell to their lowest in more than three years, although analysts said the data could have been skewed lower by the Thanksgiving holiday.

Initial claims for state unemployment benefits fell 27,000 to a seasonally adjusted 191,000 for the week ended November 29, the lowest level since September 2022. Economists polled by Reuters had forecast 220,000 claims for the latest week.

The initial claims number was also consistent with a report showing fewer job cuts in the first 11 months of 2025.

Global outplacement firm Challenger, Gray & Christmas said planned job cuts declined 53% to 71,321 last month from October. They were, however, 24% higher compared to the same period last year, and November's tally was the largest for the month since 2022.

"Initial jobless claims look better than the alternate data sources on layoffs ... (but) the latest week for claims data included the Thanksgiving holiday, and holidays often distort claims data, so this release should be taken with a big grain of salt," wrote Bill Adams, chief economist at Comerica Bank in Dallas.

"Even so, the recent trend looks good, with initial claims averaging a low 215,000 in the last four weeks."

On Thursday, U.S. rate futures have priced in an 87% chance of a 25-bps cut next week, down from 90% on Wednesday, CME FedWatch showed.

Fed funds futures have factored in more than 90 bps of easing next year, with two rate declines in the first half amid expectations the new Fed chair will push steeper rate cuts in line with what President Donald Trump wants.

Source: TradingView