U.S. Treasury yields dropped again on Monday as President Donald Trump’s tariffs spurred a flight to safety while riskier markets took a hit.
At 5:15 a.m. ET, the 10-year Treasury yield fell over 5 basis points to 3.936%. The 2-year Treasury yield dropped over 16 basis points to 3.52% and hit its lowest level since September 2022.
One basis point equals 0.01%, and yields and prices move in opposite directions.
Investors are still reeling from the impact of Trump’s tariffs last week, which hit over 180 countries and set a baseline tariff of 10% across the board. Major trading partners of the U.S. absorbed some of the steepest tariffs, with China facing a total tariff rate of 54%.
The tariffs have stoked fears of a global trade war, as countries respond with their own tariffs on the United States. China retaliated Friday by slapping 34% tariffs on U.S. goods, and the EU has vowed to impose countermeasures if negotiations fail.
Investors were hoping to see some opportunity for negotiation with the U.S. to bring down tariffs, but Treasury Secretary Scott Bessent told NBC News that despite 50 countries approaching Trump’s administration for negotiations, “they’ve been bad actors for a long time, and it’s not the kind of thing you can negotiate away in days or weeks.”
Meanwhile, Trump continued to downplay the impact of tariffs, saying on Sunday evening, “I don’t want anything to go down, but sometimes you have to take medicine to fix something.”
On the economic data front, investors are anticipating inflation data for March this week, with the consumer price index due on Thursday and the producer price index out on Friday. The inflation reading will offer insights into the health of the U.S. economy amid fears of a recession.
