The 10-year Treasury yield was higher on Friday as an earlier sell-off in the bonds market resumed, influenced by U.S. President Donald Trump’s fast-changing tariff policies.
At 4:45 a.m. ET, the 10-year Treasury yield climbed over 2 basis points to 4.416%. Meanwhile, the 2-year Treasury yield was more than 3 basis point lower at 3.809%.
One basis point is equal to 0.01% and yields move inversely to prices.
Investors have watched in fear as tariff policies have frequently changed throughout the week, with Trump enforcing a 90-day tariff reprieve on most countries on Wednesday and reducing duties to a universal rate of 10%.
The reprieve excluded China, which saw U.S. tariffs on Chinese imports rise to 145%. China struck back against the U.S. on Friday, raising its duties on American goods from 84% to 125%.
U.S. Treasurys — typically a safe haven asset during times of market volatility — saw a sharp sell-off earlier this week in light of Trump’s escalating trade war with China. That was halted after Trump announced the tariff pause, but the sell-off has resumed as tensions with China rise.
Deutsche Bank analysts noted that the U.S.-China concerns outweighed other more positive tariff news for investors.
“The main driver of the renewed market pressure was an increased focus on the US-China escalation,” the analysts said in a note. “The market reaction showed an increased sensitivity to the risks of a disorderly economic decoupling between the world’s two largest economies.”
The producer price index report for March is due, as is the preliminary University of Michigan consumer sentiment data for April.
