FX.co ★ US 10-Year Treasury Yield Rebounds

The yield on the U.S. 10-year Treasury note rose above 4.1% on Monday, showing a slight recovery from a recent six-month low after a notable decline of approximately 26 basis points last week. Investors are closely monitoring the escalation of trade tensions and their potential consequences on the global economy, while simultaneously increasing their expectations for Federal Reserve interest rate cuts. Market sentiment experienced a temporary uplift following reports suggesting that President Trump was contemplating a 90-day suspension of tariffs for all countries, excluding China. However, this report was swiftly labeled as false by the White House. Further contributing to the uncertainty, Trump has threatened to introduce a new 50% tariff on Chinese goods if China does not remove its retaliatory tariffs. Currently, traders are anticipating around four quarter-point reductions in the federal funds rate over the course of this year, with the first anticipated to occur in June. Meanwhile, there remains only a slim likelihood of the Federal Reserve making any changes before its next scheduled policy meeting.