Non farm payroll data weakens, leading to a decline in 2-year and 3-year US Treasury yields

The weakening of non farm payroll data and the downward revision of previous values have led to a greater decline in the yield of 2-year and 3-year US Treasury bonds than in the long end. The market's expectation of the necessity for the Federal Reserve to continue raising interest rates has decreased, and the curve has become slightly steeper. AI interpretation: The slowdown in employment growth and the downward revision of the previous value together constitute ironclad evidence of the cooling of the labor market. This data directly weakened the confidence of the Federal Reserve in maintaining its tightening policy, and the market quickly corrected its aggressive pricing of interest rate paths. The significant decline in short-term US bond yields reflects investors' firm expectations for the end of the interest rate hike cycle. This market reaction marks a shift in funds from defensive assets to bets on a shift in monetary policy, and the steepening of the yield curve clarifies the consensus in the market that economic growth momentum is weakening.