Treasury Yields Fluctuate

Published March 7, 2025

Treasury yields fluctuated throughout the week as the investors assessed the impact of tariffs enacted by the U.S. on imports from Canada, Mexico and China which were partially put on hold the following day. Yields continued to vary at the end of the week as the February jobs reports suggested an uncertain labor market.

On Wednesday, the Institute for Supply Management (ISM) released its purchasing managers’ index (PMI) for February indicating growth in the service industry for the eighth consecutive month. The PMI measures the change in economic activity in the services sector and is used as an indicator of U.S. economic activity. The PMI for February was 53.5%, up from a PMI of 52.8% in January and above economists’ estimates of 52.9%.

“February was the third month in a row with all four subindexes that directly factor into the Services PMI – Business Activity, New Orders, Employment and Supplier Deliveries – in expansion territory, the first time this has happened since May 2022,” said Chair of the ISM Services Business Survey Committee, Steve Miller. “Slightly slower growth in the Business Activity Index was more than offset by growth in the other three subindexes. Anxiety continues, however, over the potential impact of tariffs. Some respondents indicated that federal spending cuts are having negative impacts on their business forecasts.”

The benchmark 10-year Treasury note yield opened the week of March 3 at 4.22% and traded as low as 4.11% on Tuesday. The 30-year Treasury bond opened the week at 4.51% and traded as low as 4.42% on Tuesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 21,000 to 221,000 for the week ending March 1. This was less than the 236,000 claims analysts expected. Continuing claims increased by 42,000 to 1.90 million. Nonfarm jobs, seasonally adjusted, increased 151,000 for February, coming in lower than the 170,000 economists expected.

“There were fears that today’s jobs report would reveal some deeply unsettling news around the health of the labor market,” said chief global strategist at Principal Asset Management, Seema Shah. “Yet, while the worst fears were not met, the report does confirm that the labor market is cooling.”

The 10-year Treasury note yield finished the week of March 3 at 4.30% while the 30-year Treasury note yield finished the week at 4.60%.