US bond markets spent the week caught between a hawkish Fed pivot and softer labor data — and by Friday, the debate had clearly tilted.
Early in the week, several research notes leaned bearish on Treasuries. One argued the long end still looks rich and the curve too flat. Others flagged rising repricing risk at the front end, pointing to Kevin Warsh's appointment as Fed chair and more aggressive inflation-fighting rhetoric as reasons to expect at least one more hike this year. A separate long-horizon view called for 10-year yields drifting toward 6% over the next one-to-three years on fiscal strain and heavy issuance. Investment grade corporate bonds were also flagged as vulnerable, with forecasts of nearly $1 trillion in net supply tied to AI infrastructure buildout.
By Thursday and Friday, published commentary shifted noticeably more dovish following softer June payrolls and weaker participation. Multiple analysts argued money-market pricing of further hikes was overdone, that 2-year yields should ease, and that real yields are peaking. A recession-hedge case for Treasuries also resurfaced.