US 10-Year Yield Declines

The yield on the 10-year US Treasury note fell to 4.03% on Monday, the lowest in nearly three months, as fresh concerns of AI displacement in the economy and uncertain trade policy by the White House drove markets to pivot toward safer assets. Sharp declines for equities in the software services and payments spaces reflected renewed concerns that advancing AI technologies is due to displace industries in an unpredictable manner, forcing funds to pivot toward Treasuries. This was magnified by reports that major European and Asian economies considered suspending the implementation of trade deals struck with the US as the Presidential Administration attempted to reintroduce tariffs through different schemes of economic emergency on the balance of payments. The move followed the SCOTUS strike-down of IEEPA tariffs on Friday. Still, yields of shorter maturities fell relatively less as markets pushed back bets on a rate cut by the Federal Reserve.

The US 10-year Treasury yield edged down to around 4.07% on Monday, trimming last week’s advance as renewed uncertainty over US trade policy boosted demand for safe-haven assets. On Saturday, President Donald Trump said he would raise the 10% global levy announced a day earlier to 15%, following the US Supreme Court's decision to strike down his sweeping reciprocal tariffs. The development fueled concerns that trade agreements between the US and its partners could unravel, although senior US officials maintained that existing deals would remain intact. Markets initially welcomed Friday’s court ruling, but mounting uncertainty over Trump’s next steps overshadowed any potential benefits from lower tariff rates and possible reimbursements. On the data front, investors will monitor US durable goods orders and factory orders on Monday for fresh signals on economic momentum.

The US 10-year Treasury yield edged higher to 4.09% on Friday as investors navigated a tug-of-war between a landmark Supreme Court ruling and President Trump's swift trade policy counter-move. While the court struck down the administration's reciprocal tariffs, initially pressuring yields, the move was countered after Trump immediately vowed to sign a new 10% global tariff executive order. This pivot back to protectionism overshadowed a lackluster Q4 GDP print of 1.4%, which highlighted the economic drag of the government shutdown. Meanwhile, sticky core PCE inflation of 3% reinforced a higher-for-longer narrative, with FOMC minutes showing policymakers divided on the path forward. The 10-year note remains sensitive to the potential for massive tariff refunds acting as economic stimulus versus the inflationary pressure of the new global levy. Yields held their ground as the market weighed whether the legal setback for the White House would truly alter the Fed's restrictive trajectory.