The Globe and Mail reports in its Saturday edition that the unexpectedly weak U.S. employment report for July sparked sharp stock declines and a significant pullback in bond yields. The Globe's Darcy Keith writes that the lacklustre job figures made market observers question whether the U.S. Federal Reserve's resistance to rate cuts during this economic cycle constitutes a policy mistake. The U.S. two-year Treasury yield -- which is sensitive to Fed monetary policy -- has plunged half a percentage point since just this past Wednesday, marking its largest weekly decline since March, 2023. Both Canada's two-year and five-year bond yields fell to their lowest in more than two years, signalling further downward pressure on fixed mortgage rates. The re-evaluation of the U.S. economy's strength and the potential policy adjustments to prevent a recession are having an impact in Canada. Money markets in Canada are now predicting a high probability of the country's central bank implementing another interest rate cut at its upcoming policy meeting in September. The Bank of Montreal has updated its predictions, stating that the overnight rate of the Bank of Canada is likely to decrease by a full percentage point by January