Treasury Yields Rise Mostly After Fed's Mester Talks Inflation

On Friday morning, Treasury yields experienced a notable shift, primarily influenced by remarks delivered by Loretta Mester, President of the Cleveland Fed, which took precedence over the release of August's nonfarm payrolls report.

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Here is the current state of Treasury yields:

• The yield on the 2-year Treasury (BX:TMUBMUSD02Y) exhibited a slight decrease, settling at 4.853%, compared to 4.857% recorded on the preceding Thursday.
• The yield on the 10-year Treasury (BX:TMUBMUSD10Y) stood at 4.16%, representing a notable increase of 7 basis points from the Thursday afternoon rate of 4.090%.
• The yield on the 30-year Treasury (BX:TMUBMUSD30Y) registered at 4.279%, marking a gain of 7.6 basis points from the late Thursday rate of 4.203%.

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Market Dynamics:Loretta Mester's comments, made during a conference in Europe on Friday, took center stage in influencing these yield movements. As the President of the Cleveland Fed, Mester emphasized that inflation levels "remain too high" despite some progress. She highlighted that Fed officials are currently deliberating whether the prevailing fed funds rate target is adequately restrictive and the duration for which policy will need to maintain its restrictive stance to curb inflation.

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Mester's remarks overshadowed the release of the official jobs data for Friday, which investors and traders interpreted as reinforcing the notion of a cooling labor market. Although the United States generated a higher-than-anticipated 187,000 new jobs in August, the unemployment rate increased to 3.8%, and job gains were notably weaker than initially reported for both July and June.

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