Jobs Soft, Fed Softens

[Andrew Postell]

Treasury yields slipped again, with the 10-year hovering near 4%, as weak labor signals and dovish Fed remarks fueled bets on a December rate cut. Markets now price in an 80% chance of a 25-basis-point move. Oil’s sharp drop—on hopes for a Ukraine peace deal—added momentum to the bond rally.

September retail sales and PPI, delayed by the recent shutdown, landed close to expectations. Sales were flat, hinting at softer consumer demand, while PPI ticked higher, keeping inflation concerns alive. Neither report moved markets much, as traders remain focused on jobs data and Fed guidance. Mortgage-backed securities are choppy but generally firmer, and the 10-year yield sits at 4.0006%.

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