Donald Trump may not be happy with Friday’s jobs report, but he should be pleased with the reaction across the US rates complex.

One concern — it’s actually the concern and it’s not confined to the US — is that the perception of fiscal dominance will put a floor under long-end yields even in a mild recession, and perhaps especially then given that recessions tend to beget fiscal expansions as politicians seek to shield households (read: voters) from the ill effects of a downturn.

Such worries are compounded in the US by the overt, heavy-handed nature of Trump’s encroachments on monetary policy and his no-cares attitude regarding the potential for tariffs to put upward pressure on consumer prices.

It was thus somewhat refreshing on Friday to see the Treasury curve biased to bull flatten in response to the underwhelming jobs numbers. The double-digit decline on benchmark yields was the most pronounced since markets shuddered at the dramatic downward revisions which accompanied the July jobs report.

As the figure above shows, the ~21bps three-session rally was tied for the largest such yield decline of 2025. The long-end ETF was on track for a 2.2% weekly gain, the third-best showing of the year.

Plainly, no one wants the labor market to decelerate such that the economy begins to lose jobs on net. And no one wants a recession. But if a slowdown’s inevitable, it’s at least nice to know that USD duration retains some of its haven appeal, and is thereby capable of partially offsetting losses risk assets are sure to incur in the event the economy actually does succumb.

If you’re wondering how market pricing for the Fed reacted to the data, the answer’s illustrated below.

The front-end penciled in another 11bps worth of easing. Headed into the jobs report, market pricing reflected two quarter-point cuts fully priced plus around even odds of a third. By Friday afternoon, three cuts were almost fully priced.

Note that prior to the last jobs report (the release that prompted Trump to fire the BLS chief), markets were priced for just 34bps of easing over the balance of the year. Two NFP releases later, traders are pricing double that.

The Treasury rally did wonders for mortgage rates which, according to Mortgage Daily News, fell a whopping 16bps Friday. “It’s a well-known fact that the monthly jobs report is more capable of causing big reactions in rates than any other economic data,” color posted to the site on Friday said. “It happened last month in grand fashion, and it is happening again.”

Scott Bessent may yet make good on his promise to force down 10-year yields and thereby provide rates relief to struggling American families. It was as easy as 1, 2, 3. As simple as causing a recession.