Treasury Yields Edge Up as Fed Faces Inflation-Job Juggle

​Yields Bounce Back
Treasury yields ticked higher Friday morning after slipping the day before. The 10-year yield rose to 4.036%, the 5-year added 3 basis points, and the 30-year climbed 1 basis point. Thursday’s dip had come after data showed a mix of hotter prices and a weaker labor market.

Inflation Still Running Hot
The consumer price index jumped 2.9% year-over-year in August, its biggest monthly gain since January. Core inflation also picked up to 3.1%, well above the Fed’s 2% target — a reminder that price pressures aren’t done yet.

Jobless Claims Surge
At the same time, weekly jobless claims spiked to their highest level since late 2021, flashing fresh warnings that the labor market is softening faster than expected.

Fed’s Tightrope Act
HSBC economist Ryan Wang summed it up: the Fed is caught between its two mandates — inflation and jobs. He expects policymakers to deliver a 25-basis-point rate cut at the September 16–17 meeting, though updated projections will likely reveal splits inside the Fed over which risk matters more.

The Market Mood
​Bond traders are bracing for turbulence. With inflation proving sticky and unemployment rising, the Fed has no easy answers. For now, yields are inching up as markets await clarity from next week’s meeting.