Rates on 6-month and 1-year Treasury bills jumped above 4.8% on Thursday as traders reacted to strong ADP jobs data and comments from one policy maker suggesting the Federal Reserve will remain in rate-hiking mode. Yields across the Treasury curve were higher in morning trading, led by a jump in the policy-sensitive 2-year rate TMUBMUSD02Y, 4.461%, which rose 10 basis points to 4.47% after data showed 235,000 private-sector jobs created in December and Kansas City Fed President Esther George said she sees interest rates above 5% for some time. The Treasury curve further inverted, with the spread between 2- and 10-year rates shrinking to minus 70 basis points. Meanwhile, traders factored in a greater likelihood that the fed funds rate target, currently between 4.25% and 4.5%, will get to 5% and higher by March.
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