Signs this week that the labor market is finally getting back to normal point to the Federal Reserve’s anti-inflation interest-rate hikes as having their desired impact. With a soft landing for the economy looking more likely, traders have been betting on a Fed policy shift to cutting rates.
But the market’s nerve was rattled Thursday after leaders at the Bank of Japan hinted the end of the central bank’s negative interest-rate regime is near. That prospect helped drive the 10-year Treasury yield (^TNX) up as much as eight basis points to 4.18%.
The latest weekly jobless claims data revealed 220,000 claim were filed in the week ending Dec. 2. The number came in line with what economists surveyed by Bloomberg had expected and up just 2,000 from the week prior, largely reflecting limited increases in layoffs.