US Treasury yields tumbled on Wednesday in response to a report that private sector job creation in May was the weakest in over two years. The 2-year yield dropped more than 9 basis points, while the 10-year Treasury yield fell more than 10 basis points.
President Donald Trump urged the Federal Reserve to lower interest rates after the report, which showed private sector job growth slowing down to a near standstill. The number of new jobs added in May was 37,000, below expectations and significantly lower than April’s revised total of 60,000.
The ADP payrolls processing firm reported that labor force growth will also slow down in 2025 due to less immigration, making it harder for the Fed to justify cutting interest rates.
Investor fears were heightened after new US services data showed the sector weakening, with May’s ISM services index reading falling below 50%. The Trump administration has doubled US tariffs on imported steel and aluminum to 50% effective Wednesday, which may slow activity and raise prices.
The Federal Reserve Chair Jerome Powell was urged by Trump to cut interest rates, but it remains uncertain whether this will happen. Languishing trade talks between the US and China also added to investor concerns, with President Trump saying it’s “extremely hard” to make a deal with China’s President Xi Jinping.
Source: https://www.cnbc.com/2025/06/04/us-treasury-yields-trumps-50percent-steel-tariffs-kick-in-.html