Market Synopsis 9/12/25

Bond yields were volatile during the week of 9/8/25 to 9/12/25 as economic data leaned weaker and Fed rate cut expectations began to firm. After a softer‐than‐expected August jobs report (just ~22,000 jobs added; unemployment rising to ~4.3%) weighed on labor market strength, Treasury yields—especially the 10-year—fell from their midweek highs.

Municipal bonds performed well: their yields declined (both short and long maturities), demand remained strong, and inflows were robust despite light supply.  High yield corporates and emerging market debt saw gains, though corporate spreads remained modestly pressured relative to Treasuries. The bond market broadly priced in a high likelihood of a 25-basis point rate cut by the Fed next week, with an extremely small chance of there being a 50-basis point cut.

Overall, for the week, bond prices generally rose, yields fell, and sentiment shifted toward easing expectations—though the backdrop of inflation risks and fiscal pressures kept parts of the market under strain

Cross Market Curves for 9/12/25