U.S. Treasury markets experienced a significant selloff as December’s unexpectedly strong employment data forced a major reassessment of Federal Reserve policy expectations. The 30-year yield pushed above 5% for the first time in over a year, while yields on shorter-dated Treasuries jumped more than 10 basis points across the board. This market reaction reflects a fundamental shift in rate expectations, with traders now pricing in fewer cuts and pushing the timeline for the first reduction from June to September. Since the Fed began its cutting cycle in September, yields have climbed approximately 100 basis points, suggesting that current financial conditions may not be as restrictive as the Fed previously assumed.