Bond yields fall as rate cut bets rise

June 05, 2025 07:15 AM AEST | By Investing

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Investing.com -- Bond yields fell on Wednesday as weaker-than-expected economic data boosted rate cut odds. The U.S. 10-year treasury yield fell 2.42% to 4.352% and the 30-year fell 1.95% to 4.886%.

First, today’s ADP (NASDAQ:ADP) National Employment Report showed the U.S. gained only 37,000 private sector jobs in May, versus 114,000 jobs expected by economists. "After a strong start to the year, hiring is losing momentum," said Dr. Nela Richardson, chief economist, ADP. The all-important nonfarm payroll report is due tomorrow.

Next (LON:NXT), the ISM services report showed that the largest sector of the U.S. economy contracted in May, marking the first time since June 2024. Services PMI was reported at 49.9 below April’s reading of 51.6 percent and below the consensus of 52.

The odds of a Federal Reserve rate cut in July moved up slightly from 24% to 28.7%. The odds of a September rate cut moved from 54.5% to 56.5%.

President Donald Trump continues to press Federal Reserve Chairman Jerome Powell to lower interest rates. Today, following the ADP number, Trump said, “Too Late” Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”

Others echoed the sentiment in the Trump administration. Bill Pulte, U.S. Director of Federal Housing FHFA, said, “Jerome Powell must lower rates, and now. Enough is enough.”

This article first appeared in Investing.com

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