10 November 2026: US Treasury yields climbed after a much stronger-than-expected October jobs report, as traders bet that a resilient labour market gives the Federal Reserve room to raise interest rates again in December. With October inflation data due today, bond markets are on edge.
Key points:
- The US economy added 165,000 jobs in October, far above forecasts of around 59,000–65,000.
- The unemployment rate fell to 4.1%.
- August and September payrolls were revised up by a combined 84,000.
- After the data, the 2-year yield rose to about 4.52%, the 10-year to about 4.88% and the 30-year to about 5.29%.
A labour market that refuses to slow
The October report, released on 6 November, surprised almost everyone. Payrolls rose by 165,000, nearly three times the consensus estimate, and earlier months were revised higher. For the Fed, which is trying to bring inflation back to 2%, a strong jobs market means less reason to worry that higher rates will cause a sharp slowdown.
How the bond market reacted
Yields rose across the curve. The 2-year yield, which is most sensitive to Fed policy expectations, gained around 5 basis points to 4.52%, while the 10-year rose about 4 basis points to 4.88% and the 30-year to 5.29%, according to Reuters. Traders reduced bets on any rate cuts in the near term and raised the odds of a December hike.
Wages are not keeping up with inflation
Average hourly earnings grew 3.1% from a year earlier. That would normally be a solid figure, but with headline inflation at 3.7% in September, real (inflation-adjusted) wages are falling. That squeeze on household budgets is one reason inflation and energy prices were such a big issue in the midterm elections.
The Fed’s next move
The Fed raised rates to 3.75%–4.00% in September and held in October. Since the jobs data, Fed Governor Christopher Waller has said he sees a December rate hike as likely. The next big test is today’s CPI report. Read our October CPI preview and why the Fed is hiking in 2026.
What it means for investors and traders
- Bond investors: yields near 5% on longer bonds offer higher income, but prices could fall further if inflation stays hot.
- Mortgage rates: rising Treasury yields tend to keep mortgage rates elevated.
- Forex: higher US yields can support the dollar, as seen when the dollar index rose about 0.7% after the jobs report.
- Gold: higher yields increase the opportunity cost of holding gold.
Risk warning: Bond prices fall when yields rise, and the value of investments can go down as well as up. Trading bond, forex or index CFDs with leverage carries a high risk of rapid losses. This article is for information only and is not investment advice.
Sources
- Reuters via Yahoo Finance: Strong October jobs report sends yields higher
- CNBC: Treasury yields rise as investors await October CPI
- CNBC: Treasury yields, traders look ahead to jobs data
- TheStreet: Markets and Fed outlook, 9 November 2026
Abdullah Munir