Treasury Yields Surge on Strong U.S. May Jobs Gain, Dimming Rate-Cut Hopes

U.S. Treasury prices fell sharply on Friday, June 5, 2026, lifting yields after the Labor Department reported much stronger-than-expected job growth for May. The data reinforced expectations that the Federal Reserve will keep interest rates higher for longer, crushing hopes for an imminent policy pivot. Nonfarm payrolls rose by a robust figure that handily beat economist forecasts, while the unemployment rate ticked lower. The surprising strength signaled that the labor market remains tight despite elevated borrowing costs, effectively reducing the urgency for the central bank to ease monetary policy. The yield on the benchmark 10-year note jumped to its highest level in weeks, and the 2-year yield, highly sensitive to rate expectations, also spiked. Traders quickly pared bets on a summer rate cut, now seeing the Fed on hold through year-end.