NEW YORK (AP) – It’s been a tough week for bond investors.
Bonds extended their slump on Friday, after a report showed the U.S. employers added 280,000 workers to their payrolls in May. That was more jobs than forecast and suggests that the economy is back on track after starting the year in a slump.
The yield on the 10-year Treasury note climbed to an eight-month high of 2.43 percent, directly after the report was published. That’s 0.31 percentage points higher than it was at the start of the week, a big move in the Treasury market.
Traders are speculating that the Federal Reserve will raise its benchmark interest rate later this year, for the first time since the recession as the economy maintains its recovery. Bond yields typically climb when investors are expecting higher rates.
The jobs report “will certainly keep rates moving higher,” said Kathy Jones, Vice President, Fixed Income Strategist, Schwab Center for Financial Research.