Treasury Yields Steady as Weak January Hiring Data Reinforces Low-Growth Outlook

U.S. Treasury yields were largely unchanged on Wednesday, settling into a narrow range after an initial dip triggered by a weaker-than-expected January jobs report reinforced the view that the U.S. labor market is losing momentum without tipping into a sharp downturn.

Early trading saw yields move lower after payrolls processor ADP reported that private employers added just 22,000 jobs in January. The figure was not only well below the Dow Jones estimate of 45,000 but also weaker than December’s downwardly revised gain of 37,000. The data highlighted how hiring has slowed to a crawl at the start of 2026, extending a trend that defined much of the second half of last year.

As the session progressed, yields clawed back some of those early losses. The benchmark 10-year Treasury yield reversed course and was last down marginally at around 4.27%. The 30-year yield slipped to about 4.893%, while the 2-year note yield edged slightly higher to 3.578%. The modest moves underscored a market that is digesting softer economic data but stopping short of repricing the Federal Reserve’s near-term policy path in a significant way.

The ADP report painted a picture of an economy stuck in a low-hire, low-fire equilibrium. Job creation was narrowly concentrated, with education and health services accounting for the bulk of gains. Without that sector’s strength, overall private employment would have fallen. Several white-collar and goods-producing sectors, including professional and business services and manufacturing, shed jobs, adding to concerns that higher interest rates and tighter financial conditions are continuing to weigh on corporate hiring plans.

The implications are mixed for bond investors. On one hand, sluggish job growth supports the argument that labor market tightness is easing, which could eventually relieve wage pressures and help inflation trend lower. On the other hand, the lack of outright weakness gives the Fed little urgency to pivot quickly toward rate cuts, especially with inflation still above target and policymakers wary of easing too soon.

The resilience of the 2-year yield reflected this tension. Because the 2-year note is highly sensitive to expectations for Fed policy, its slight uptick suggested markets still see rates staying higher for longer, even as growth shows signs of fatigue. Longer-dated yields, by contrast, were marginally lower, pointing to ongoing demand for safe assets and a belief that medium- to long-term growth will remain constrained.

Broader market sentiment also drew support from developments in Washington. President Donald Trump on Tuesday signed legislation ending a partial government shutdown, easing concerns about disruptions to federal operations and the broader economy. The shutdown had already delayed the release of several key economic indicators, including the closely watched nonfarm payrolls report from the Bureau of Labor Statistics.

That delay loomed large over Wednesday’s trading. Under normal circumstances, investors would be positioning ahead of Friday’s official jobs report. Instead, with the BLS release postponed, markets are leaning more heavily on private-sector data like ADP, weekly jobless claims, and business surveys. Those indicators collectively suggest cooling, not collapse, in the labor market.

Adding another political and policy dimension to the day was confirmation that Federal Reserve Governor Stephen Miran has stepped down as chairman of the Trump administration’s Council of Economic Advisors. Miran joined the council in January 2025 and was later appointed to the Fed in September to complete the unexpired term of Adriana Kugler. His departure removes a senior economic voice at the White House with direct insight into monetary policy deliberations, at a time when coordination and messaging around growth risks and inflation remain sensitive.

Overall, the day’s developments reinforced a familiar narrative for investors: the U.S. economy is slowing gradually, not breaking sharply. Treasury yields, anchored by that view, continue to trade within recent ranges as markets wait for clearer confirmation on whether softer hiring will translate into sustained disinflation and, ultimately, a shift in Federal Reserve policy. Until that clarity emerges, bond markets appear content to tread water, reacting to weak data without committing to a decisive directional move.