Bonds

The strong jobs report had traders shredding their aggressive bets for outsized rate cuts at the next policy meeting.

Goldman Sachs Group Inc.'s Luke Gillam and Bank of America Corp.'s Murad Khaled, set to join AlbaCore Capital and Apollo Global Management, are the latest in a growing list of top bankers to make the leap.

Five-year notes were the worst performer among Treasury benchmarks, with yields rising by more than 5 basis points, though all rose by at least 4 basis points.

Investors began pulling funds rapidly after it disclosed last month the departure of Chief Investment Officer Ken Leech amid Justice Department and Securities and Exchange Commission probes into its trading practices.

Bonds and stocks are rallying ahead of a critical Fed meeting. But this time, the central question for Chair Jerome Powell is which approach — reducing rates by 25 basis points or 50 basis points.

In trading ahead of the debate, Treasuries rallied as oil tumbled and after U.S. bank regulators released revised details on proposed bank-capital rule changes.

Treasuries have returned 1.7% this month through Aug. 28, on pace for a fourth straight monthly gain, according to the Bloomberg US Treasury Total Return Index.

In the blue-chip bond market, a democratic victory would be supportive for basic industry, capital goods and utilities sectors, but a negative for telecoms, technology, banks, and autos.

Economists are also forecasting faster and deeper cuts to borrowing costs over the next year, and see the central bank reducing the policy rate from the current 4.5% to 3% by next July.

In the run-up to Powell's Jackson Hole speech, Treasuries tumbled across the US curve, with the move led by shorter maturities.