US Treasury yields fell from their highs after a successful bond auction eased concerns about demand for US debt. The 10-year Treasury note yield retreated to 4.31% after climbing overnight above 4.51%. A 90-day pause in some tariffs announced by President Donald Trump helped ease worries in the fixed income market.
The 30-year Treasury bond yield hit a high of 5.02% overnight, but was last at 4.715%. The 2-year Treasury yield rose nearly 17 basis points to 3.908%, jumping in afternoon trading. This upward move for short-term yields could be a sign that traders think the tariff pause will make the Federal Reserve less likely to cut rates.
A strong demand for US Treasuries was evident in the recent auction, with an average bid-cover ratio of 2.67. However, concerns remain about foreign investors selling their US government securities, particularly from Japan and China, which have been affected by the trade tensions. The White House’s efforts to reduce the trade deficit could lead to fewer dollars available for countries to buy Treasuries, potentially sparking a further sell-off.
The move higher in yields is trouble for both the Trump administration and the Fed. It undermines the claim that the tariff rollout was lowering rates, providing a buffer for consumers. Instead, it suggests that fixed-income investors may be worried about the impact of tariffs on inflation and the economy. The Fed’s hand may be forced to cut official lending rates if tariffs continue to spike and recession fears grow.
Source: https://www.cnbc.com/2025/04/09/us-treasury-yields-investors-weigh-new-reciprocal-tariffs-.html