FX.co ★ US 10-Year Treasury Yield Falls as Tariffs Heightened Growth Concerns

On Thursday, the yield on the US 10-year Treasury note dipped to 4.08%, marking its lowest point since mid-October. This decline followed President Trump's recent announcement of reciprocal tariffs, which spurred a widespread move towards safer investments. President Trump introduced a 10% tariff on all imports, imposing even steeper rates for nations with trade surpluses: 34% on Chinese goods, 20% on European products, and 24% on Japanese imports. He justified this decision, asserting that US tariffs would be roughly half the level of those enforced by other countries, taking into consideration their existing tariffs, trade barriers, and other inequitable practices. This new tariff regime stirred apprehension about the US economic prospects, reviving recession worries. Consequently, traders adjusted their expectations, now anticipating three to four quarter-point rate cuts by the Federal Reserve this year—a revision from three anticipated cuts as of Wednesday—with the first reduction expected in June.