US 10-Year Yield Holds Near 3-Month Low

The yield on the 10-year US Treasury note was below 4.05%, remaining near the lowest levels in nearly three months as fresh concerns of AI displacement in the economy and uncertain trade policy drove markets toward fixed income. Valuations in 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 reintroduced tariffs through an economic emergency on the balance of payments. The move followed the SCOTUS strike-down of IEEPA tariffs on Friday. Still, the yield curve flattened as markets pushed back bets on a rate cut by the Federal Reserve.

The yield on the 10-year US Treasury note climbed to around 4.05% on Tuesday, rebounding after a sharp decline in the prior session as investors assessed ongoing US trade uncertainties. In recent developments, global logistics giant FedEx filed a lawsuit seeking a full refund after the US Supreme Court struck down President Donald Trump’s emergency tariffs. Trump threatened to raise global tariffs from 10% to 15% in response to the ruling and cautioned that countries that “play games” with existing trade agreements could face steeper duties. Meanwhile, Fed Governor Christopher Waller said on Monday that he is open to leaving rates unchanged in March if upcoming February jobs data shows a strengthened US labor market. Geopolitical focus remains on US-Iran talks, which are scheduled to resume on Thursday.

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.