U.S. 10-year Treasury yield falls as traders weigh new economic data, debt ceiling progress

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U.S. Treasurys slid on Thursday as the debt ceiling crisis came closer to a resolution and traders assessed the latest economic data.

The yield on the 10-year Treasury was down by nearly 4 basis points to 3.601%. The 2-year Treasury was last trading at 4.341% after falling by almost 5 basis points.

Yields and prices move in opposite directions and one basis point equals 0.01%.


The Republican-controlled House of Representatives on Tuesday passed the Fiscal Responsibility Act with a 314-117 majority, boosting optimism about the debt ceiling crisis being resolved ahead of the June 5 deadline. This is the first date on which the U.S. could default on its debt obligations, which would likely trigger widespread economic issues across global financial markets.

Tensions had run high in recent weeks as negotiations between the White House and House Speaker Kevin McCarthy to raise the debt ceiling proved difficult, and their eventual compromise deal drew criticism from both Republicans and Democrats.

The bill must now be passed by the Democrat-controlled Senate, which leaders from both sides have said they hope will happen in the coming days, before it can be signed into law by President Joe Biden.  

Data from ADP released Thursday showed private payrolls grew more than economists expected in May, coming in at 278,000 against a 180,000 consensus estimate from Dow Jones. Meanwhile, less jobless claims were filed last week than economists forecasted. The labor market has been closely watched by market observers given concerns that sustained strength could prompt the Fed to raise interest rates again at the June meeting.

The ISM Manufacturing Survey, which represents the percentage of businesses reporting expansion, came in at 46.9% for May. That's slightly under the forecast of 47% from economists polled by Dow Jones. A reading under 50% signals contraction.

The data is among points likely to inform the Federal Reserve's next monetary policy moves, especially regarding interest rates, and could provide clues about whether a recession is on the horizon for the U.S. economy.

— CNBC's Jeff Cox contributed to this report.