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By Staff Reporters

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The sizzling-hot July jobs report could force the Federal Reserve to continue raising interest rates at the fastest pace since 1994 as it tries to cool inflation and the labor market. U.S. employers unexpectedly added 528,000 jobs in July, a surprisingly strong gain that defied fears of a slowdown in labor markets as they confront scorching-hot inflation and rising interest rates. Wage growth also accelerated, surging by 0.5% in the one-month period from June.  But the blowout jobs report, coupled with higher-than-expected wage growth, could ultimately pave the way to a third consecutive interest rate hike of 75 basis points — triple the usual size — when FOMC policymakers meet in September. Therefore, traders are already pricing in a 70% chance of another super-sized increase in the fall, according to the CME Group’s FedWatch tool, which tracks trading. 

And, the 10-year Treasury yield rose on the back of a stronger-than-expected jobs report for July. The yield on the 10-year Treasury was 2.83%, and the yield on the 30-year Treasury bond was up 10 basis points and trading at 3.068%. Meanwhile, the 2-year was up 20 basis points to 3.242%. Yields move inversely to prices. The data showed non-farm payrolls increase 528,000 last month and surpassed DJIA’s expectations of 258,000. At the same time, wage growth rose with average earnings climbing 0.5% for the month and 5.2% over last year. The stronger than anticipated report showed that the U.S. is not likely in a recession. This move marks a reversal from the recent trend that saw the 10-year yield trending lower on fears the Fed’s hiking campaign was tipping the economy into a recession. Earlier this week, the 10-year yield fell to 2.50% and its lowest since April, according to FactSet.

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