I hope we're not facing another bout of stagflation....I lived through that once and it's not pretty..
NEW YORK (Reuters) - Treasury prices surged on Friday after a stunningly weak reading on U.S. jobs challenged official optimism that the economy would bounce back strongly after a slowdown last quarter.
The market is still pricing in a quarter point hike from the Federal Reserve (news - web sites) at its meeting next week but now sees rates rising less than first thought by the end of the year. The benchmark 10-year note leaped 1-25/32 in price, lowering yields to 4.19 percent from 4.41 percent late Thursday. Two-year yields dived to 2.35 percent from 2.62 percent.
Non-farm payrolls rose just 32,000 in July, when median forecasts were for a 228,000 gain. June's rise was revised down to 78,000 from the original 112,000. The unemployment rate did dip to 5.5 percent from 5.6 percent, but was overshadowed by the payrolls figures.
http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=11&u=/nm/20040806/bs_nm/markets_bonds_payrolls_dc