Time to 'Screaming Buy' Treasuries? Wall Street Bets on A Steeper Yield Curve as Labor Market Cools Off

"There are signs of the economy slowing, which is what the Fed wants to see; It likely opens the door for no rate hike at the next Fed meeting in three weeks," said Ryan Detrick, chief market strategist at Carson Group in Omaha.

"Monetary policy implications are relatively straightforward -- it just got a lot harder to justify a hike in Q4; September is off the table; even if there is a modest upside surprise in the August CPI series," Ian Lyngen, head of U.S. rates at BMO said in a note last Friday.

Michael Cudzil, a portfolio manager at Pacific Investment Management Co., said that the jobs data leaves "the bond market comfortable with the view that the Fed is on hold for now and maybe done for the cycle; If they are done for the hiking cycle, it's then about looking at the first cut that leads to steeper curves."

George Goncalves, head of U.S. macro strategy at MUFG, said that the employment reports looked like "the beginning of the end of the robust job market and the countdown for how long can the Fed stay on hold; this will favor the front-end versus the back-end."

Subadra Rajappa, head of U.S. rates strategy at Societe Generale, suggested that "the trade to be in is steepeners; Either the market starts to price in more Fed cuts and the curve bull-steepens, or the Fed stays on hold with strong data and long-end sells off in that case."