Though Bonds Began Weekend With Price Jump, Some Analysts Hold Cheers Until Next Fed Move
NEW YORK -- As bond investors return from the holiday, they still have memories of Friday's pleasant kickoff, when bonds went through the roof as investors cheered upbeat economic news. But some analysts say the rejoicing may be out of place, because the jury is still out on the Fed's next move.</br></br>The price spike on Friday, the last trading day before today, was triggered by bond-friendly employment news, which eased fears that the Federal Reserve will raise interest rates next month. The Labor Department reported that 124,000 nonfarm employees were added to the nation's payrolls in August, a little less than half of what Wall Street had been expecting. The unemployment rate fell to 4.2% from 4.3% in August.</br></br>Meanwhile, average hourly wages increased just 0.2%, comforting investors worried that rising wages will lead to higher inflation.</br></br>The news sent bond prices climbing. In preholiday trading that ended early, at 2 p.m. EDT Friday, the bellwether 30-year Treasury bond rose 1 17/32, or $15.313 for a bond with $1,000 face value, to 101 13/32. The bond's yield, which moves in the opposite direction of its price, fell to 6.014%. It was the first gain for Treasurys in seven sessions.</br></br>Other types of bonds, such as mortgage-backed securities, also rallied.