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Treasury yields steady as investors await jobs report

Treasury yields moved moderately lower Friday as investors awaited the jobs report from President Donald Trump’s first full month in office. The yield on the 10-year Treasury note edged lower to 2.604%, while the yield on the 30-year bond was flat at 3.189%. The yield on the two-year note was off slightly at 1.376%. Treasury yields have climbed dramatically over the past two weeks, driven by the increasing probability that the Federal Reserve will raise interest rates during next week’s two-day policy meeting, which begins March 14. Presently, the Fed-funds futures market is pricing in a nearly 90% chance of a hike next week, thanks largely to hawkish remarks from a bevy of Fed officials including Fed Chairwoman Janet Yellen and New York Fed President William Dudley. However, market strategists believe that a print below the 150,000 level could possibly convince the Fed to hold off. But after Automatic Data Processing Inc.’s blockbuster reading on private-sector employment, which showed the U.S. economy adding nearly 300,000 jobs last month, those expectations have greatly diminished.

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