The 10-year Treasury note yield slipped on Wednesday as concerns over an escalating trade war and weak economic growth led traders to send bond prices higher.
The benchmark 10-year yield Treasury yield fell 4 basis points at 4.256%. The 2-year Treasury yield was lower by 2 basis points at 4.074%.
One basis point equals 0.01%, and yields and prices move in opposite directions.
President Donald Trump’s rhetoric on the U.S.’ trade policy stoked worries across markets about economic growth. In his first cabinet meeting on Wednesday, Trump pledged that tariffs against Canada and Mexico, two of the U.S.’ three largest trading partners, will go into effect at the end of a one-month suspension. He also promised to soon expand the scope of tariffs to include a 25% duty on goods from the European Union.
Housing data released Wednesday showed new home sales data fell 10.5% to 657,000 in January, well below economists’ consensus of 671,000 as surveyed by Dow Jones, and lower than an upwardly revised 734,000 in December.
This is the latest in a series of weaker-than-expected economic reports. The February consumer confidence reading from The Conference Board was well below expectations. Existing home sales also declined, and the S&P Global Purchasing Managers’ Index fell short of economists’ estimates.
“Weakening economic data is pushing investors out of equities and into bonds,” said Mark Hackett, chief market strategist at Nationwide.
The big event of the week will be the release of the personal consumption expenditures price index for January — the Federal Reserve’s preferred inflation gauge — scheduled to be published Friday morning. The PCE will offer a clue into the central bank’s future monetary policy decisions and rate-cutting path.
Correction: An earlier version incorrectly identified the day when Trump’s first cabinet meeting took place.
