Recent weak U.S. employment data has become the dominant driver of 2-year Treasury yield sentiment, with September nonfarm payrolls adding just 29,000 jobs versus 84,000 expected and the unemployment rate rising to 4.2%. This softening has lowered market-implied odds of an October Fed rate hike and prompted a sharp intraday decline in the 2-year yield to around 4.76% on October 1 before partial recovery. Persistent fiscal deficits, elevated term premiums, and resilient nominal GDP growth near 6.6% year-over-year continue to cap downside, keeping the yield well above the Fed’s median dot-plot path. Traders are watching the next FOMC meeting and October inflation releases for signals on whether further labor-market deterioration could push the 2-year yield toward lower October lows or whether sticky inflation reasserts upward pressure.