Friday's jobs number would have to be a massive beat for the Federal Reserve to raise its benchmark federal funds rate in September, according to Greg Davis, global head of fixed income at Vanguard.
"We think it's a pretty low probability event that we see a September rate hike, unless there's a huge blowout number of 300,000-plus jobs at the end of this week," Davis said in an interview on CNBC's "Fast Money." Economists polled by Reuters expect non-farm payrolls to come in at 180,000.
Davis said, however, that a surprising beat on the payrolls number could cause significant moves in the bond market. In particular, Davis said he would expect to see the yield curve flatten in that case. But Vanguard's base case view does not expect a rate hike until December, he said.
U.S. Treasurys still look "really attractive to international investors" because of the "global phenomenon where rates around the world are extremely low," Davis explained.
He said the yield on the U.S. 30-year bond is still near 2.23 percent, whereas the yield on Germany's 30-year bond is sitting near 0.455 percent. For these reasons, Davis said his firm is expecting rates to remain "stable or maybe even grind a little bit lower at the long end of the curve."
Vanguard's U.S. Fixed Income Group had over $1 trillion in assets under management as of July 31.
— CNBC's Stephanie Landsman contributed to this report.