CORRECTED-TREASURIES-US yields jump as jobs gains beat expectations

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By Karen Brettell

Jan 10 (Reuters) - Longer-dated U.S. Treasury yields jumped to their highest levels since November 2023 on Friday after data showed employers added 256,000 jobs in December, far surpassing economists’ expectations, while the unemployment rate fell.

Employers were expected to have added 160,000 jobs during the month. The unemployment rate dipped to 4.1%, below forecasts for 4.2%.

“This report will fuel yields even higher. The labor market is not showing any signs of weakening,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Benchmark 10-year Treasury yields US10YT=RR reached 4.79% while 30-year yields US30YT=RR jumped to 5.005%, both the highest since November 2023.

Interest rate sensitive two-year yields US2YT=RR rose to 4.388%, the highest since July 2024. The yield curve between two-year and 10-year notes US2US10=TWEB flattened by around 1 basis point on the day to 41.8 basis points.

Traders are now betting the Federal Reserve will wait until at least June to reduce its policy rate. Before the monthly jobs report, traders had seen the Fed cutting as early as May with about a 50% chance of a second rate cut before the end of the year.

(Reporting By Karen Brettell; Additional reporting by Stephen Culp; Editing by Christina Fincher)

((karen.brettell@thomsonreuters.com;))