## [# TLT Leads Bond ETF Surge As Jobs Data Locks In Fed Cut](/sections/features/tlt-leads-bond-etf-surge-jobs-data-locks-fed-cut)
# TLT Leads Bond ETF Surge As Jobs Data Locks In Fed Cut
Bond ETFs ripped higher after weak jobs data locked in a September Fed cut and stoked bets on a bigger move.
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[By Sumit Roy ](/authors/sumit-roy)
Sep 05, 2025
Edited by: ETF.com Staff
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Bond ETFs rallied sharply on Friday after a weaker-than-expected jobs report cemented expectations for a Federal Reserve rate cut this month, with markets even starting to price in the chance of a larger move.
Nonfarm payrolls increased by just 22,000 in August, well below the 75,000 economists had expected. The unemployment rate ticked up to 4.3% from 4.2%, its highest level in nearly four years.
Job growth has now run below 100,000 for four straight months, beginning in May, the month after President Trump introduced his “Liberation Day” tariffs.
Revisions to prior data were mixed. July’s figure was revised up modestly from 73,000 to 79,000, while June’s already weak 14,000 gain was revised down to a loss of 13,000—the first negative print since 2020.
The disappointing numbers fueled bets that the Fed will move to cut rates at its September 17 meeting. Fed funds futures now fully price in a 25 basis point cut and assign a 14% probability of a larger, 50 basis point move.
The U.S. central bank has so far held off on cutting rates amid uncertainty over inflation, which continues to run above the Fed’s 2% target. The impact of Trump’s tariffs is still feeding into consumer prices.
August CPI data, due next Thursday, is expected to show core inflation rising 3.1% year over year. The Fed’s preferred gauge, the core PCE price index, won’t be released until September 25, after the rate decision. The index rose 2.9% year over year in July.
## Yields Slide, Curve Steepens
With markets leaning hard into rate cut bets, Treasury yields sank, led by the short end of the curve. The two-year yield fell 11 basis points to 3.47%, its lowest since September 2022.
The 10-year yield dropped 9 basis points to 4.08%, a low not seen since April, while the 30-year slid 7 basis points to 4.78%, its lowest since August.
The yield curve has been steepening in recent months as the short end falls on expectations of Fed easing while the long end stays elevated amid sticky inflation and mounting debt concerns.
The spread between the 30-year and 5-year yield was last around 123 basis points, near its widest since June 2021.
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## Treasury ETFs Jump
Treasury-focused ETFs were among the biggest beneficiaries of the decline in rates. The [**iShares 20+ Year Treasury Bond ETF (TLT)**](/TLT) climbed, extending its year-to-date gain to 4.1%. The [**iShares 7-10 Year Treasury Bond ETF (IEF)**](/IEF) rose as well, pushing its YTD return to 7.5%. The [**iShares 1-3 Year Treasury Bond ETF (SHY)**](/SHY) gained, lifting its YTD return to 3.9%.
Equities were more mixed. The [**Vanguard S&P 500 ETF (VOO)**](/VOO) briefly touched a fresh intraday record high before pulling back, as investors weighed the prospect of rate cuts against signs of a slowing economy.
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[ Sumit Roy Senior ETF Analyst ](/authors/sumit-roy)
Sumit Roy is the senior ETF analyst for etf.com and author of (Don't) Invest Like a Pro. He creates a variety of content for the platform, including… [View Bio](/authors/sumit-roy)
Related Topics [Bond](http://www.etf.com/topics/bond)
[Fixed Income](http://www.etf.com/topics/fixed-income)
[Treasury](http://www.etf.com/topics/treasury)