The U.S. 10 year yield rose to 1.801%, the highest since January 2020. The U.S. 10 year yields have gained 25 basis points this week, its best weekly rise since September 2019. The Fed minutes released on Wednesday suggested an earlier than expected rate hike and the possibility that the Fed may cut its bond holdings sooner than anticipated, which is a big part of the jump in yields this week. On Friday, San Francisco Fed President Mary Daly, who is not a voter this year, weighed in on the balance sheet debate. She said she could see the Fed shrinking its $8 trillion balance sheet soon after it raised rates once or twice. There is an 80% chance that the Fed funds futures will be a 25 basis point tightening by March on Friday, and more than three rate hikes by the end of the year. There is a sense of a move toward a quicker balance sheet runoff as a result of the Fed's liftoff date. Gregory Faranello, head of U.S. rates at Amerivet Securities in New York, said that there was no mistaking, once the first rate hike is done, it's on the table. The yields of U.S. 2 year and 5 year olds, which reflect the market's interest rate outlook, rose to their highest since March and January 2020, respectively. The new 11 week peaks were scaled by the U.S. 30 year yields. The yields went up after a U.S. jobs report showed positive elements, such as the decline in the unemployment rate and an increase in wage growth. U.S. non-farm payrolls rose by 199,000 last month, according to data. The payrolls were up by 400,000, according to the market forecast. In November, the unemployment rate fell to 3.9% from 4.2%, underscoring a tighter labor market, while average hourly earnings rose 0.6% in December, up from 0.4% the previous month. The U.S. benchmark 10 year yields were last up 3 basis points at 1.7673% in late afternoon trading. In the mid- 1.80s we should get a lot of two-way activity, said Jim Vogel, senior rates strategist at FHN Financial in Memphis, Tennessee. It makes sense for 10 s to hang around the 1.70 s area or go into the mid- 1.80 s as the next central clearing point. The U.S. 30 year yields hit a fresh 11 week peak of 2.145%, and was up 2 basis points at 2.1137% at the end of the day. The yield was up 21 basis points this week, the biggest weekly advance in a year. The 2 year U.S. yields rose to 0.908%, the highest since March 2020, and were down 1 basis point at 0.8611% last year. They had their largest weekly gain since October, they were up nearly 14 basis points this week. U.S. 5 year yields have increased to its highest since January 2020 of 1.525%. They were last up 2 basis points at 1.5003% On the week, the U.S. 5 year yields were roughly 24 basis points, their largest increase since September 2019. The most active CBOT 10 year Treasury note futures contract, where speculators can make leveraged bets and hedge against the benchmark U.S. government note, plunged in price to its lowest since February 2020. After flattening in the last two sessions, the U.S. yield curve was steepened on Friday. The gap between 2 year and 10 year yields increased by 89.70 basis points, the lowest since mid-December.