Implications of the Payrolls Report on the Treasury Market

The payrolls report, which showed 187,000 jobs added but also downward revisions and an increase in the unemployment rate, suggests that the Fed may have no urgency to hike rates in September. There is speculation whether the Fed will need to move again this cycle, indicating terminal policy rates at the moment. The Fed's upcoming statements will likely maintain flexibility to lower rates, even if they don't plan to do so, to prevent investors from pricing in future rate cuts.