Treasuries Move To The Downside Amid Concerns About National Debt

(RTTNews) - Treasuries came under considerable selling pressure during trading on Thursday amid rising concerns about the national debt.

Bond prices moved notably lower early in the session and remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped by 4.5 basis points to 4.183 percent.

The weakness among treasuries came after President Donald Trump called for the U.S. military budget to be increased to $1.5 trillion in 2027.

"Watch the bond market closely as Trump's proposal to radically increase defense spending could put even more pressure on the already sky-high U.S. national debt," said Russ Mould, investment director at AJ Bell.

"While Trump insists any extra spending would be paid for by tariffs, bond markets might not be as convinced," he added.

Treasuries also moved to the downside as trading looked ahead to the release of the Labor Department's closely watched monthly jobs report on Friday.

Economists currently expect employment to increase by 60,000 jobs in December after climbing by 64,000 jobs in November. The unemployment rate is expected to edge down to 4.5 percent from 4.6 percent.

The jobs data could have a significant impact on the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting later this month.

The Fed is widely expected to leave interest rates at its January 27th-28th meeting but is seen as likely to cut rates by at least another quarter point in the coming months.

Ahead of the monthly jobs report, a report released by the Labor Department this morning showed first-time claims for U.S. unemployment benefits edged up by slightly less than expected in the week ended January 3rd.

The monthly jobs report is likely to be in the spotlight on Friday, although the University of Michigan's preliminary reading on consumer sentiment in January may also attract attention.