Investors expect U.S. inflation to run at an annual rate of 1.98% on average over the next decade, or 1.36 percentage points higher shortly after the Brexit vote, reports Min Zeng for the Wall Street Journal. The Federal Reserve has a targeted 2% inflation rate.

Moreover, further pressuring the Treasury bond market, a solid U.S. manufacturing release Thursday strengthened optimism over the U.S. economy and drove investors away from safe-haven assets.

Looking ahead, investors will be watching for the U.S. nonfarm payrolls report on Friday, one of the most important monthly economic indicators. Observers expect an upbeat report could add to increased demand for riskier assets and drive further selling in bonds.

“We are moving to a new regime in the bond market,” Nick Gartside, international chief investment officer of global fixed income at J.P. Morgan Asset Management, told the WSJ.

For more information on the Treasuries market, visit our Treasury bonds category.