In the week leading up to Friday’s employment update, global bond yields climbed amid concerns over the ongoing conflict in Iran and persistent government spending. Investors are weighing the latest job market data as a fresh input for decisions on holding U.S. Treasuries. With yields on bonds reaching multiyear highs, market participants are closely watching for signals on when and how quickly the Federal Reserve will hike its overnight lending rate.

As the Fed tightens, investors brace for tighter credit conditions and rising rates on Treasury notes. According to the CME Fed Watch tool, expectations for a September rate increase have strengthened. The benchmark 10-year U.S. Treasury yield, which influences consumer loan rates, dipped slightly in the latter half of the week but remains near its highest level since early 2025.

Higher yields translate to pricier mortgages, auto loans, and other borrowing. Bank of America analysts noted that a lower-than-expected August job gain would likely move bond yields more than a stronger reading. However, they added that employment figures alone probably won’t seal a September rate hike. CPI data for August is expected to carry more weight in shaping the Fed’s next move.