The US 10-year Treasury yield inched up to 4.09% on Friday as investors weighed a sharp policy whipsaw in Washington: a landmark Supreme Court ruling versus President Trump’s rapid trade response. The court’s decision to strike down the administration’s reciprocal tariffs initially pushed yields lower, but that move was quickly offset when Trump pledged to sign a new executive order imposing a 10% global tariff.
This renewed tilt toward protectionism overshadowed a lackluster Q4 GDP reading of 1.4%, which underscored the economic drag from the government shutdown. At the same time, sticky core PCE inflation at 3% reinforced expectations that rates may stay elevated for longer, with FOMC minutes revealing a divided committee on the policy outlook.
The 10-year note remains caught between opposing forces: the potential for sizable tariff refunds to function as a de facto fiscal stimulus, versus the inflationary impulse from a broad new levy on imports. Yields were steady as markets debated whether the legal setback for the White House would materially shift the Fed’s restrictive policy trajectory.
