2-year Treasury yield declines from 14-year high after jobs report comes in as expected

The yield on the 2-year Treasury note ticked lower on Friday after August’s jobs report came in near expectations and eased some fears that a hot labor market would force the Federal Reserve to continue hiking rates at an aggressive pace in order to tame surging prices.

Treasury yields have been on a tear in recent days, with the 2-year yield climbing to 3.55% and hitting its highest since 2007. After closing at 3.04% last week, the 10-year yield jumped above 3.29% on Thursday as investors bet on a more aggressive Federal Reserve.

Those moves seemed to cool on Friday, with the yield on the 2-year Treasury last down 11 basis points at 3.396%. The yield on the 10-year Treasury fell 7 basis points to 3.193%, while the yield on the 30-year was down 3 basis points to 3.342%.

Yields move inversely to prices, and a basis point is equal to 0.01%.

August’s jobs report showed the economy add 315,000 payrolls last month and well below the shock 528,000 added in July, while the unemployment rate rose slightly to 3.7%. Dow Jones estimates anticipated 318,000 jobs added last month and an unchanged unemployment rate of 3.5%.

The report could play a key role in the Federal Open Market Committee’s deliberations over its next monetary policy move.

Earlier in the summer, the Fed backed away from forward guidance for future rate adjustments, focusing instead on making data-dependent decisions — potentially making key data points like nonfarm payrolls even more important.

On Wednesday, jobs data from payroll processing company ADP showed that private payrolls increased by just 132,000 in August, a fall from the 268,000 rise in July.

— CNBC’s Samantha Subin, Elliot Smith and Jeff Cox contributed to this report.