The annual growth rate of core PCE in the United States dropped to 3% in August, while actual personal consumption expenditure increased by 0.6% per month. In September, the private sector in the United States added 90000 jobs, higher than the expected 70000. The yield of 10-year US Treasury bonds has risen to 5.295%, while the yield of 2-year bonds is close to 4.90%. The market is reassessing Federal Reserve policies, fiscal deficits, and long-term funding costs.
AI interpretation: The unexpected growth of non farm employment data directly proves the strong resilience of the labor market, providing solid economic support for the Federal Reserve to maintain high interest rate policies. The sustained heat in the job market has offset the dovish expectations brought about by the slowdown in inflation, forcing the market to revise its aggressive bets on a shift in monetary policy. The rise in US bond yields reflects investors' deep pricing of the long-term high interest rate environment, and the increase in funding costs will further suppress the valuation space of risk assets.
