U.S. Treasury yields reversed and moved higher on Thursday as investors assessed expectations for the Federal Reserve's interest rate policy plans after strong jobs data.
The yield on the benchmark 10-year Treasury yield gained nearly 1 basis point to 3.713% after trading lower earlier. The 2-year Treasury yield was last trading 6.8 basis points higher at around 4.458% after dipping less than a basis point.
Investors digested data showed that private payrolls rose by 235,000 for the month of December, well ahead of the 153,000 Dow Jones estimate and the 127,000 initially reported for November.
Many expect that the strong labor market could keep the Fed in its hiking mode. The Fed's December meeting minutes, released on Wednesday, indicated that central bank officials are expecting rates to stay elevated and not be cut in 2023.
Fed officials would stick to their current restrictive policy approach until they are satisfied that inflationary pressures are easing, the minutes suggested.
Many investors have been concerned about the pace of the Fed's rate hikes throughout 2022 leading the U.S. economy into a recession.
At its December meeting, the Fed announced a 50 basis point rate hike, which was a slight decrease from the 75 basis point increases implemented at each of its previous four meetings.
A series of Fed speakers are due to make remarks as the week continues, with St. Louis Fed President James Bullard and Atlanta Fed President Raphael Bostic expected to speak on Thursday.
On the data front, balance of trade figures for November are due to be released on Thursday. Later in the week, several key employment data points, which could inform future Fed policy, are expected.