US Treasury yields plummeted on Friday as investors fled to safety amid a sharp sell-off in the stock market and growing concerns over the economy’s health. The 10-year Treasury yield dropped about 7 basis points to 4.427%, while the 2-year yield fell by more than 6 basis points to 4.202%.
The drop in yields came alongside a steep decline in equities, with the Dow Jones Industrial Average losing over 700 points, its worst day of the year. The S&P Global Purchasing Managers’ Index for manufacturing also fell short of expectations, coming in at 51.6 for February, compared to a consensus estimate of 52.8.
Consumer sentiment and existing home sales took further hits, with the University of Michigan’s consumer sentiment index falling more than expected in February. This data releases have reinforced fears of an economic slowdown, causing investors to seek safety in longer-term Treasury bonds.
According to Jose Torres, senior economist at Interactive Brokers, “Another fresh round of data releases reflecting a slowing economy is weighing on stocks and generating bull-flattener movements across the yield curve.” Investors are now locking in rates before they potentially drift south.
Source: https://www.cnbc.com/2025/02/21/us-treasury-yields-investors-weigh-the-state-of-the-us-economy-.html