U.S. Treasury yields edged higher at the start of the week on Monday, as investors positioned themselves ahead of a critical slate of delayed economic data, including the January nonfarm payrolls report, amid lingering uncertainty over Federal Reserve leadership and the trajectory of interest rates.
At 2:48 a.m. ET, the benchmark 10-year Treasury yield climbed 2.6 basis points to 4.232%, the 30-year yield rose 2.7 basis points to 4.882%, and the 2-year yield increased about 1 basis point to 3.504%. Bond prices and yields move inversely, and the modest uptick reflects cautious repositioning as traders anticipate fresh insights into the labor market and inflation following the partial government shutdown that disrupted last week’s data releases.
The most closely watched release is the January nonfarm payrolls report, originally scheduled for Friday, February 6, but now set for Wednesday morning due to the shutdown. Economists surveyed by Dow Jones forecast a gain of 60,000 jobs for the month—following December’s modest 50,000 increase—with the unemployment rate expected to hold steady at 4.4%.
A stronger-than-expected print could reinforce the view that the labor market remains resilient, potentially supporting higher-for-longer interest rates, while a weaker figure would likely revive expectations for additional Federal Reserve rate cuts later in 2026. The January consumer price index (CPI), also delayed, is scheduled for Friday morning. Consensus forecasts call for the annual inflation rate to ease to 2.5%, down from December’s level, providing further evidence of disinflationary pressures.
Other key releases include December retail sales on Tuesday, offering a read on consumer spending resilience, and weekly initial jobless claims on Thursday, which provide real-time labor market signals. A full slate of Federal Reserve speakers adds to the week’s importance, beginning Monday with Governors Christopher Waller and Stephen Miran. Their remarks will be scrutinized for clues about the policy path under incoming Fed Chair nominee Kevin Warsh, whose hawkish reputation has contributed to recent yield firmness and a reassessment of the rate-cut outlook.
This week’s data arrives at a pivotal moment. The Federal Reserve’s January 28 policy statement removed language warning of “downside risks to employment,” signaling greater confidence in the economic outlook and prompting markets to push back expectations for further rate reductions in 2026. Combined with Warsh’s nomination—viewed by many as potentially less dovish than Jerome Powell—the backdrop has kept longer-dated yields elevated and contributed to a risk-off tone in equities and risk assets.
Yields’ modest rise on Monday also reflects positioning ahead of the jobs report, with some investors trimming duration exposure in case the print surprises to the upside. At the same time, the 2-year yield’s relative stability suggests markets still price in at least one or two quarter-point cuts by year-end, though the probability has declined since Warsh’s name surfaced.
Broader market sentiment remains cautious. U.S. stock futures opened lower, extending Friday’s losses, while gold and silver continued to face pressure from higher-for-longer rate expectations. The dollar held firm, supported by the prospect of sustained U.S. yields relative to global peers.
The delayed nature of the data adds an extra layer of uncertainty. The partial government shutdown disrupted the normal flow of economic statistics, leaving markets without fresh labor and inflation readings for several weeks. Analysts note that January figures can be volatile due to seasonal factors and the Lunar New Year holiday’s shifting impact on global supply chains, but the combination of payrolls, CPI, and retail sales will provide a comprehensive snapshot of the economy’s health heading into the second quarter.
As the week unfolds, the interplay between the jobs report, inflation data, and Fed commentary will likely dictate yield direction. A solid labor market print combined with cooling inflation would reinforce the “soft landing” narrative and support current yield levels.
Conversely, weaker-than-expected data could revive rate-cut bets and pull yields lower. With Warsh’s confirmation hearings on the horizon and the Fed navigating a delicate balance between inflation control and employment support, this week’s releases carry outsized weight in shaping market expectations for monetary policy in the post-Powell era.
