Treasury Yields Jump After Strong Jobs Report

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.

The US 10-year Treasury note yield rose to 4.1% Friday after the US Supreme Court struck down President Donald Trump’s broad emergency tariffs. The court ruled that the International Emergency Economic Powers Act cannot be used to impose sweeping duties without congressional approval, raising questions over whether and how quickly collected tariffs might be refunded. Markets also weighed a fresh batch of economic data and its implications for Fed policy. The US economy grew at an annualized 1.4% in Q4, falling short of 3% forecasts, raising concerns about momentum amid tariffs and the government shutdown. Meanwhile, December PCE data showed headline and core inflation accelerating more than expected, while the S&P Global US Composite PMI indicated the slowest expansion in private-sector activity in ten months. Minutes from the latest FOMC meeting highlighted divisions among policymakers, with some signaling that further rate hikes may be needed if inflation remains persistent.

The yield on the US 10-year Treasury note was little changed at 4.08% on Friday, as investors balanced softer economic growth against firm inflation data and ongoing geopolitical risks. The US economy expanded at an annualized 1.4% in Q4, slowing sharply from 4.4% in Q3 and missing expectations of 3%, raising questions about the economy’s resilience to tariffs and the government shutdown. At the same time, PCE data showed personal income and spending continued to rise solidly in December, while both headline and core inflation accelerated more than expected. Minutes from the latest FOMC meeting revealed divisions among policymakers, with some signaling that further rate hikes could be warranted if inflation remains elevated. Markets have dialed back expectations for aggressive easing but still price in two 25-basis-point rate cuts by year-end. Escalating tensions with Iran, as President Donald Trump weighs further action, also supported demand for safe-haven Treasuries.