Treasury yields are steady as Kashkari says time to raise rates, ADP jobs data is weak

U.S. Treasury yields held steady on Wednesday as traders mulled over the outlook for interest rates and weighed a weaker-than-expected jobs reading from payrolls processing firm ADP.

The 10-year U.S. Treasury note yield — the main benchmark for mortgages, auto loans and credit card debt — was more than 1 basis point lower at 4.613%.

The longer-dated 30-year Treasury bond yield, which is more sensitive to geopolitical risks, fell 2 basis points to 5.169%. The 2-year Treasury note yield, which tends to react in line with short-term Federal Reserve interest rate decisions, was down more than 1 basis point at 4.179%.

One basis point is equal to 0.01%, and yields and prices move in opposite directions.

On Wednesday, Minneapolis Federal Reserve President Neel Kashkari told CNBC that policymakers should begin raising rates, a move that could start as early as September with the central bank’s next meeting.

“Corporate earnings are through the roof. They’re doing great. The consumer is hanging in there. The labor market is hanging in there. I look at this constellation and I say, what evidence do I have that monetary policy is particularly restrictive right now?” he said on CNBC’s “Squawk Box.” “So, I argued now is the time to start slowly moving up as we get more data in.”

ADP also reported Wednesday that nonfarm job growth slowed in July, with private companies adding 44,000 positions. That was lower than the downwardly revised 95,000 recorded in June and below the 75,000 that economists polled by Dow Jones were expecting.

This comes ahead of Friday’s key nonfarm payrolls data and unemployment rate for July from the Bureau of Labor Statistics. Economists are expecting the report to show an increase of 83,000 jobs last month, with the unemployment rate remaining unchanged at 4.2%.

Investors continued to eye how a potential deal to unlock the Strait of Hormuz is likely to shape the U.S. economic picture and inflation path.

Treasury Secretary Scott Bessent told CNBC Tuesday that a deal to allow commercial ships to pass through the Strait of Hormuz could be struck this week. That sent U.S. government bond yields sharply lower, with U.S. crude oil prices tumbling almost 6% during Tuesday’s session.

Later, U.S. Central Command in a post on X declared the Strait of Hormuz’s southern route “free and open.”

Oil prices were little changed Wednesday, with West Texas Intermediate futures for September delivery closing at $75.22 per barrel — a fall of 0.73% — and Brent crude, the global benchmark, closing up 0.11% at $79.45.