By Ellie Ismailidou

10-year yield records largest one-day gain since Nov. 8, 2013

NEW YORK (MarketWatch) -- Treasury yields ended the week at their highest levels of 2015 after markets interpreted a stronger-than-expected jobs report as a sign that the Federal Reserve might be closer to an interest rate hike.

The 10-year Treasury yield has now risen during four of the past five weeks.

According to the Bureau of Labor, the U.S. economy created 295,000 new jobs in February, though wage growth remained stagnant as inflation remained low.

The yield on the 10-year note rose 13 basis points to 2.240%, according to Tradeweb data, snapping a two-day losing streak with the largest one-day yield gain since Nov. 8, 2013.

Over the course of the week, the 10-year yield rose 23.8 basis points, the largest one-week yield gain since Feb. 6, 2015.

The two-year note yield rose 8.4 basis points to a year-to-date high of 0.727% and 9.6 basis points over the course of the week to mark the largest one-week yield gain since Feb. 6, 2015.

The 30-year bond yield increased 12.4 basis points to 2.841%.

Bond yields move inversely to prices.

Economists celebrated the 295,000 new jobs number, which came in well above the 238,000 consensus estimate from analysts polled by MarketWatch.

The unemployment rate declined to 5.5% from 5.7%.

Traders immediately began parsing the impact of the jobs report on the timing of the first Fed rate hike since 2006.

"It was a solid report, which keeps the Fed on track for an interest rate hike sometime this summer or as late as September," said Kathy Jones, Chief Fixed Income Strategist at Schwab Center for Financial Research.

Federal Reserve Chairwoman Janet Yellen highlighted the key role wage growth will play in any interest rate hike decision during her February testimony before Congress.

The economy has added at least 200,000 jobs for 12 straight months, the longest streak since 1995.

The constant month-over-month increase means the Fed will probably drop the word "patient" from its forward guidance in its next meeting, Jones said, which would be interpreted as a sign that a rate hike is near.

But the Fed's conundrum is the continuous job growth with no inflation, Jones said.

Average hourly wages rose 3 cents, or a meager 0.1%, to $24.78 in January. And the year-over-year increase was a lackluster 2%, said the Department of Labor Statistics.

According to Jones, inflation pressures and lackluster wage growth stem from the fact that job growth is concentrated in the service sector and in lower paying jobs.

Still, the news is expected to keep Treasury yields rising, albeit not steeply.

Treasury yields have been moving higher since Feb. 2. "The trend now is starting to edge up but I don't think it will be a fast move up," Jones said.

"What we will definitely see is more of a flattening of the yield curve, as the market has an expectation of rising short-term rates at a time when inflation is still low," Jones added.

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