BlackRock’s Rosenberg Says Traders Price 25bp Fed Hike After 172k Jobs Gain
BLK•Traders in the $31 trillion Treasuries market have priced in a 25 basis-point Federal Reserve rate increase by year-end, with 60% odds of an October move after nonfarm payrolls rose by 172,000 in May. Two-year yields jumped 11 basis points to 4.15% and ten-year yields climbed six basis points to 4.53%.
1. Market Pricing for Rate Hike
Traders in the $31 trillion U.S. Treasuries market now expect a 25 basis-point increase in the federal funds rate by December, with interest-rate swaps showing roughly 60% odds of that move occurring in October.
2. Rise in Treasury Yields
Friday’s bond selloff drove two-year Treasury yields up 11 basis points to 4.15% and ten-year yields up six basis points to 4.53%, reflecting growing expectations for tighter monetary policy.
3. BlackRock’s Rosenberg Commentary
Jeffrey Rosenberg, senior portfolio manager at BlackRock, noted that markets appear intent on pushing the Federal Reserve toward higher rates, potentially forcing policymakers into a reactive stance at upcoming meetings.
4. Strength in Labor Data
Nonfarm payrolls increased by 172,000 in May—the strongest three-month advance in over two years—while the unemployment rate remained at 4.3%, reinforcing the case for a future rate hike.
