Why Bond Yields Jumped After NFPUnited States 10 Year Government Bonds YieldTVC:US10YsamykohThink of Treasury yields as the market's prediction of where interest rates are headed. ### Before NFP The market was thinking: "The economy may be slowing, so the Fed could cut rates soon." If rates are expected to fall: * Existing bonds with higher rates become more valuable. * Investors buy bonds. * **Bond prices rise.** * **Yields fall.** ### After Strong NFP The jobs report said: > "The economy is still strong." Now traders think: * Fed may cut rates later than expected. * Interest rates could stay higher for longer. * New bonds issued in the future may offer higher yields. So investors don't want to pay as much for today's bonds. ### What happens mathematically? Suppose a bond pays **$40/year**. If investors pay **$1,000** for it: Yield = 40/1000 = 4% If investors sell it and the price drops to **$950**: Yield = 40/950 =approx 4.21% The payment didn't change. The **price fell**, so the **yield rose**. ### Why stocks care The 10-year Treasury is the "gravity setting" for markets. If the 10-year yield rises: * Borrowing gets more expensive. * Future earnings are worth less today. * Growth stocks like tech often get pressured. If the 10-year yield falls: * Money becomes cheaper. * Growth stocks usually get a boost. ### The shortcut for your daily trading When you see: **Strong NFP / Strong CPI / Strong Retail Sales** ➡️ Higher growth expectations ➡️ Fewer Fed cuts expected ➡️ Bond prices ↓ ➡️ Treasury yields ↑ ➡️ USD ↑ That chain reaction is one of the most important things to watch for SPY, QQQ, and options trading. 📊