HighAmbition

#非农就业数据 #每周来晒 Nonfarm payrolls came in shockingly low! Just 29k, far below expectations—is a Fed rate hike in October completely off the table?
Tonight’s nonfarm payrolls report delivered a direct blow to the market. Interestingly, just before the data was released, the market still viewed it as a “lackluster report” and had priced its impact at a recent low. Yet this very report that nobody cared about produced the biggest surprise in this year’s labor market.
Let’s start with the key figures: U.S. seasonally adjusted nonfarm payrolls increased by only 29k in September. What does that mean? The market expected 90k, while the previous figure was 162k—less than one-third of expectations and nearly 80% lower than the previous month.
The unemployment rate also failed to hold steady, rising from the previous and expected 4.1% to 4.2%, a new high for the period. People were still discussing how resilient employment was, but overnight, much of that optimism vanished.
Don’t assume this is merely a one-month fluctuation; the signal behind it is actually quite significant.
Looking back, payrolls rose by 21k in July, 162k in August, and 29k in September. The three-month average comes to just over 70k, nowhere near last year’s monthly average of more than 200,000.
The cooling in employment is not due to any single sector dragging things down—it is broad-based weakness: manufacturing has shown no improvement, service-sector hiring has slowed sharply, and leisure and hospitality, education, and healthcare, which had previously carried the load, have also lost momentum. White-collar positions in information and finance continue to contract.
Put simply, after being squeezed by high interest rates for so long, companies have finally reached their limit and started cutting hiring. The labor market has officially shifted from “extremely tight” to loosening. The most direct impact of this report is that it effectively seals the door on a Fed rate hike in October.
Just one week ago, the market was still pricing in a more-than-60% probability of a rate hike in October. But over the past two days, Jefferson and Williams successively struck a dovish tone, saying they should wait and see and need not rush. At the time, many people thought it was just lip service.
Now that the nonfarm payrolls data is out, it has given them a solid reason: with employment this weak, there is no need to rush into another hike. Barring surprises, the October policy meeting will most likely leave rates unchanged, and even hawkish statements will soften considerably. Policy will officially shift from a “rate-hike cycle” to an “observation period.”
The market reacted quickly after the data was released. Let’s go through the major assets one by one.
First, stocks: in the short term, they will certainly breathe a sigh of relief. With rate-hike expectations receding, U.S. Treasury yields will likely fall, easing pressure on high-valuation technology and growth stocks.
But don’t celebrate too soon. Weak employment is essentially a weak economy, and corporate earnings will likely come under pressure later. So this is more likely to be a rebound and recovery, not the start of a bull market; volatility and grinding consolidation will probably continue.
Next is gold. The logic is simple: rate-hike expectations have faded, real rates are heading lower, and safe-haven sentiment over a weakening economy provides additional support. But don’t chase it too aggressively. Inflation remains sticky, and the Fed cannot immediately pivot to rate cuts. Gold is more likely to move from its previous pressured range into choppy trading at a higher level.
Finally, oil and commodities will see greater divergence. Weak employment means expectations for aggregate demand will be revised downward, which is bearish for oil prices. But tensions in the Middle East have not eased, and geopolitical premiums continue to provide support. So crude oil will most likely remain volatile at high levels—any decline may be limited, while its upside also lacks momentum.
Industrial commodities will be somewhat weaker, with pressure on the demand side gradually becoming apparent.
Overall, this nonfarm payrolls report is a turning point. The market had previously been debating whether employment was truly resilient and whether more rate hikes were needed. Now the answer is clear: the cooling in employment is a trend, not an accident; an October rate hike is essentially off the table, and the next question is whether inflation can fall along with it.

#US30-YearTreasuryYieldHits5.595%,HighestSince2002
30-Year U.S. Treasury Yield Breaks Above 5.6%
This Is Not Simply an Inflation Story
The 30-year United States Treasury yield has moved above 5.6%, reaching its highest intraday level since June 2002.
What makes the move particularly notable is that expectations for near-term Federal Reserve rate increases have actually cooled.
On September 29, New York Federal Reserve President John Williams indicated that the Federal Reserve may only need to raise rates once more this year and is not in a hurry to act. Following those comments, market pricing for an October rate increase fell from roughly 70% to 50%.
So why is the long end of the Treasury curve still moving sharply higher?
The answer may lie less in expectations for the next Federal Reserve move and more in the return of the term premium.
The Long End Is Pricing a Different Risk
Long-term Treasury yields can broadly be viewed through two components.
The first is expectations for future short-term interest rates.
The second is the term premium, which represents the additional compensation investors demand for holding longer-duration bonds and accepting greater interest-rate, inflation and market risks.
The September 16 Federal Open Market Committee meeting delivered a 25-basis-point rate increase to 3.75%–4.00%.
At the same time, preliminary September composite purchasing managers' index data came in at 58.4, the strongest reading in 62 months.
Yet two-year breakeven inflation expectations have barely moved.
That distinction matters.
The recent rise in long-term yields appears to be driven more heavily by real yields and changing risk compensation than by a sudden surge in near-term inflation expectations.
The Term Premium Is Moving Higher
San Francisco Federal Reserve estimates put the 10-year term premium around 1.35%, approximately 23 basis points higher than a year earlier.
The term premium tends to expand when investors demand greater compensation for holding long-duration government debt.
Broadly speaking, that can happen when investors expect inflation to remain persistent or when the balance between bond supply and demand becomes less favorable.
With short-term inflation expectations showing relatively limited movement, the supply-demand explanation becomes increasingly important.
Treasury Supply Keeps Rising
The supply side of the equation remains substantial.
The Congressional Budget Office estimates the fiscal 2026 United States federal deficit at approximately $1.9 trillion, equivalent to around 5.8% of gross domestic product.
Total United States federal debt has also moved above $40 trillion.
Meanwhile, the Treasury Borrowing Advisory Committee continues to accommodate significant long-duration borrowing.
That means the market must absorb a growing quantity of long-term government debt.
The question is no longer simply how much Treasury debt exists.
It is who is willing to absorb it at current prices.
Overseas Demand Is Showing Signs of Weakness
Several major foreign holders have reduced their Treasury exposure.
Japan reportedly sold approximately $71.4 billion of United States Treasuries during the first half of the year.
China's Treasury holdings have fallen to around $633.4 billion, the lowest level since September 2008, following reductions of roughly $98 billion over the previous year.
Official foreign institutions have also reduced holdings since the escalation of the Middle East conflict.
March 2026 saw foreign investors sell approximately $240 billion of Treasuries in a single month, according to the figures cited in this thesis.
Taken together, these developments suggest that some of the traditional marginal buyers of long-duration United States government debt are becoming less aggressive.
Treasury Auctions Are Sending Another Signal
Recent auction statistics reinforce the demand-side concern.
Indirect bidding for the two-year Treasury declined from approximately 66% in August to 57.8%.
Five-year indirect bidding dropped from above 65% to 54.3%.
The seven-year auction recorded indirect demand of approximately 57.2%.
Meanwhile, primary dealers absorbed 14.74% of the 30-year Treasury issue, the highest proportion in nearly a year.
The five-year auction also recorded a 3.1-basis-point tail, one of the largest on record for that maturity.
When foreign and indirect buyers absorb less supply while primary dealers take on a greater share, the market can begin to show signs of declining absorption capacity.
That is an important development for long-duration yields.
Two Misconceptions About the Yield Surge
The Long End Is Not Necessarily Predicting Aggressive Rate Hikes
A common interpretation is that a sharp rise in 30-year yields must mean investors are expecting significantly more Federal Reserve tightening.
The recent pricing does not fully support that explanation.
After Williams' September 29 comments, the probability assigned to an October rate increase declined from approximately 70% to 50%, while December expectations moved from around 95% to 91.5%.
Short-term rate expectations therefore softened even as long-term yields climbed.
That divergence points toward factors beyond the immediate Federal Reserve rate path.
Higher Yields Do Not Automatically Mean Inflation Is Exploding
Another assumption is that a new high in long-term yields must reflect rapidly accelerating inflation expectations.
Again, the data are more nuanced.
Two-year breakeven inflation expectations have remained relatively stable and below their earlier highs.
The current move therefore appears to contain a significant real-yield and fiscal component rather than being purely an inflation trade.
Wall Street's View Is Far From Unified
Institutional investors are interpreting the move differently.
Rick Rieder, BlackRock's global head of fixed income, has expressed a more constructive view toward long-duration bonds and has reportedly begun adding exposure incrementally.
Bridgewater founder Ray Dalio has taken a much more cautious position, highlighting the risks created by America's large debt burden and rising interest costs.
Karen Ward of J.P. Morgan Asset Management expects 10-year yields to face difficulty moving significantly above 5%.
ING has outlined a more aggressive scenario in which yields could eventually approach 6%.
A survey of 173 market experts found that slightly more than half expected the 30-year Treasury yield to exceed 6% this year.
The range of views itself highlights how uncertain the long-end outlook has become.
What Would Invalidate the Term-Premium Thesis?
The current explanation depends heavily on the assumption that the term premium is rising because Treasury supply is becoming harder for the market to absorb.
That thesis would need to be reconsidered if the term premium falls below approximately 1.2%.
Another warning signal would be a sustained improvement in Treasury auction demand, including narrower auction tails and indirect bidding returning above 65%, while long-term yields remain above 5.5%.
Such a combination would suggest that the supply-demand imbalance is easing and that another factor may be driving yields higher.
Persistent inflation or a repricing of credit and fiscal risk would then become increasingly important possibilities.
The Next Data Points Matter
Two developments deserve particular attention in October.
October 16 — August Treasury International Capital data
This will provide a clearer picture of how foreign investors are changing their Treasury holdings.
September nonfarm payrolls and August personal consumption expenditures data
These releases could influence expectations for the Federal Reserve's future rate path and potentially change the relationship between the short and long ends of the Treasury curve.
Bottom Line
The move above 5.6% in the 30-year Treasury yield is significant, but the story is broader than simply saying inflation is returning or that aggressive Federal Reserve tightening is coming.
The more important question is whether the market is demanding a larger term premium because the supply of long-duration Treasury debt is increasing while traditional demand is becoming less reliable.
If that dynamic continues, long-term yields could remain elevated even while expectations for near-term Federal Reserve rate increases moderate.
For risk assets, including equities and cryptocurrencies, this matters because higher real yields can tighten financial conditions and reduce the appetite for long-duration and higher-risk assets.
The key signal to watch now is not simply the next Federal Reserve decision.
It is whether Treasury demand can keep pace with Treasury supply.