The unexpected rise in the unemployment rate in November stimulates demand for US bonds, causing yields to decline across all maturities.

John Briggs, head of interest rate strategy at the North American branch of the French Trade Bank, said that the focus of the market is on the unemployment rate, which has risen to 4.6%, the highest level since 2021. With the unexpected increase in the US unemployment rate in November, this has strengthened market expectations that the Federal Reserve will further cut interest rates in 2026, causing a slight increase in US Treasury bond prices. Yields on various maturities of US Treasuries briefly declined, with the two-year yield, which is sensitive to policy changes, falling by 5 basis points to 3.45%, a new low since October 24. The 10-year yield dropped by 4 basis points to 4.14%. Subsequently, yields narrowed their declines and returned to previous levels. Pricing of forward contracts tied to the outcome of the Federal Reserve's policy decision in January next year shows that the market expects an easing of about 5 basis points, with a 20% probability of a rate cut of 25 basis points. By mid-2026, rate cuts have been fully priced in.