Recent changes in US Treasury yields have become evident following the new tariffs introduced by President Donald Trump. Investors are actively assessing the implications of these decisions on economic growth and inflation.
State of Treasury Yields
As of publication, the 10-year Treasury yield stood at 4.156%, while the 2-year yield rose to 3.73%. Global markets have begun to decline due to uncertainties surrounding Trump's tariffs.
Market Reaction to Trump's Tariffs
Investors have flocked to Treasury bonds following the introduction of Trump's new tariffs, pushing yields lower. This decision impacted over 180 countries. Treasury Secretary Scott Bessent noted that nearly 70 countries contacted the White House for tariff discussions.
Outlook for Economic Growth and Inflation
Federal Reserve Chair Jerome Powell commented that the new tariff policy could raise inflation and slow economic growth. Labor market conditions also indicate uncertainty. Analysts at JPMorgan increased the odds of a recession in 2025 to 60%.
Trump's tariff policy poses significant risks to the US economy. Expectations indicate that such measures will affect inflation rates and economic growth momentum.
