Treasury Yields Dip Ahead of Jobs Data as Markets Weigh Trump’s Spending Bill and Debt Outlook

During Tuesday’s trading session, U.S. Treasury yields slipped as investors braced for significant labor market data due later in the week. The benchmark 10-year Treasury yield declined by more than 3 basis points to 4.195%, while the 30-year yield also fell by over 3 basis points to 4.738%. The 2-year Treasury yield saw a smaller decline, dropping by more than one basis point to 3.703%. This market movement reflects the typical inverse relationship between bond prices and yields.

Short-Term Treasury Yields Mixed as Investors Await Key Employment Data This Week

Despite the overall downward trend in major long-term yields, shorter-term Treasury instruments showed mixed results. The 1-month and 3-month Treasury yields experienced slight increases to 4.244% and 4.338%, respectively. Meanwhile, the 6-month Treasury dipped slightly to 4.248%. Notably, the 2-year Treasury yield rose to 3.744% despite the earlier mention of a decrease, indicating possible intra-day fluctuations or updates to data. These shifts suggest investor repositioning in anticipation of upcoming economic indicators.

With U.S. markets set to close on July 4 for Independence Day, investors are turning their attention to the early release of June payroll data. Typically published on Fridays, the report will be released a day earlier on Thursday due to the holiday. In addition, the ADP private payroll report is scheduled for Wednesday, providing an initial look at employment conditions. These reports are key indicators of labor market strength and could play a significant role in shaping upcoming decisions by the Federal Reserve.

Trump’s Spending Bill Advances, Adding Debt but Eased by Lower Treasury Yields

Beyond economic data, political factors are also shaping investor outlook. President Donald Trump’s sweeping spending proposal, dubbed the “big, beautiful bill,” passed a critical procedural vote in the Senate over the weekend. The measure advanced narrowly with a 51-49 vote, as two Republicans joined all Democrats in opposition before ultimately switching to support it. The bill’s advancement signals significant fiscal implications, potentially adding $3.3 trillion to the national debt over the next decade.

Despite concerns about the added debt burden from Trump’s bill, analysts suggest that lower Treasury yields could help offset some of the fiscal impact. Vishnu Varathan of Mizuho Securities emphasized that while the debt increase is substantial, softer yields may reduce the financial strain. Investors will also keep an eye on the Job Openings and Labor Turnover Survey (JOLTS) report for May, expected later Tuesday, to gain further insight into labor market trends and broader economic momentum.