President Trump Rescues Treasuries After Blockbuster Payrolls Sent Yields Soaring: Sept. 4, 2026 — 2026-09-04
What moved & why: A blockbuster nonfarm payrolls report (162k jobs, beating all official forecasts) sent Treasury yields soaring and strengthened rate-hike odds for the Sept. 16 FOMC meeting, but President Trump's Truth Social demands for Fed rate cuts and threats of trade retaliation pared losses across the curve, bringing yields close to flatlines by day's end.
Cross-asset:
- Equities: 9 of 11 principal sectors down; all 4 major domestic benchmarks slipped into the red.
- Treasuries: 2-year yield jumped to 19-month high on payrolls, then retreated as Trump comments provided support; curve remained near flatlines by close.
- Dollar: Appreciating on session despite Trump's anti-Fed rhetoric, though well off highs; improving growth prospects offsetting currency headwinds.
- Commodities: Cyclical commodities relatively unchanged; precious metals sinking on weakening speculative enthusiasm.
- Crypto: Cryptocurrencies sinking on weakening speculative enthusiasm.
Econ / Fed angle: August payrolls surged to five-month high (162k vs. median 45k); unemployment held steady at 4.1%; wage growth at 0.3% m/m and 3.1% y/y near expectations; labor force participation rose to 61.6% (first increase since Sept. 2025); average workweek at 34.3 hours (highest since March 2024). Fed officials (Warsh, Bessent, Williams, Waller) offered conflicting signals: some hawkish on strong growth, others citing easing core inflation and suggesting Middle East turmoil is the primary price pressure driver. Market confusion persists on whether a hike occurs in 12 days, with officials encouraging investors to ignore current fundamentals that support tighter financial conditions.
Watch next: Softening inflation data in coming sessions; FOMC rate decision on Sept. 16; potential resolution of Middle East conflict (Treasury Secretary Bessent flagged yield decline if resolved); US-Canada trade tensions and tariff impacts on employment.