FX.co ★ US 10-Year Yield Falls to 3-Month Low

The yield on the 10-year US Treasury note fell toward 4.03% on Thursday, its lowest level in three months, as investors showed strong demand for the safety of US government debt and favored longer-maturity notes and bonds. Global markets rotated into Treasuries amid persistent uncertainty over US economic policy after President Trump threatened to impose 15% tariffs under the Section 122 balance-of-payments economic emergency, but ultimately settled on a lower 10% rate.

Heightened geopolitical concerns also supported sovereign bonds, with safe-haven flows increasing as the US delegation opened nuclear talks with Tehran. The 10-year yield declined even in the face of stubborn inflation and a still-solid labor market, prompting rate traders to delay their expectations for the Federal Reserve’s first rate cut of this cycle to July.

However, shorter-dated Treasuries underperformed, as bill supply continued to expand despite the Federal Reserve’s ongoing purchases of short-term securities aimed at keeping reserve balances ample.