U.S. fiscal earnings: 10-year U.S. Treasury yield drops to six-month lows after Donald Trump’s comprehensive tariff plan

U.S. fiscal yields fell sharply on Thursday after President Donald Trump announced a comprehensive tariff policy. Trump’s new policy has raised concerns about a potential global trade war. The fiscal yield in 10 years fell 11 points to 4.085%. That was the lowest level in six months, while the two-year yield fell by 9.5 basis points to 3.809%.

According to reports, the broader bond market responded to the trend, with 30-year fiscal yields falling to 4.44%. The fiscal yield in one year fell to 3.957%. The decline in yields is an indicator of shifting investor sentiment to safer assets amid imminent economic uncertainty.

Trump’s tariff plan triggers global market turmoil

According to a report by CNBC, the benchmark tariffs on all imports signed on Wednesday are effective 10% from April 5. In addition, it imposed high tariffs on more than 180 countries. According to the report, China faces 34% tariffs, the EU faces 20% tariffs, Vietnam faces 46% tariffs, and Taiwan will see 32% tariffs.
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Trump reportedly defended his move to impose tariffs. He said the U.S. will accuse the countries about half of what they accused Washington. However, the announcement triggered a shock wave through financial markets, while the Wall Street index fell.

Media reports added that before the market opened, S&P 500-year futures fell 3.4%, Dow Jones Industrial Average futures fell 2.8%, and Nasdaq futures fell 3.8%. Bloomberg reports that major retailers including Nike and Best Buy have seen more than 11% of stock as companies relying on overseas production pay higher costs.

Fear of recession and lower interest rates speculation

According to media reports, economists warn that the tariff shock could slow down U.S. economic growth. It is reported that forecasts suggest GDP growth may be below 1% in 2025. The CNBC report cites the chief investment officer of UBS global wealth management company Mark Haefele, who said the Fed will likely be forced to lower interest rates by 75-100 basis points by the end of 2025 to offset the economic impact.
The Treasury initially generated gains as investors react to the news. Overnight, the 10-year yield dropped to 4.04%, and then stabilized at 4.11% in the morning. Higher bond yields usually indicate stronger expectations for economic growth. But their decline suggests that concerns are growing about the downturn.

Oil prices and global markets feel impacted

Bloomberg reported that the oil market was also hit as U.S. crude oil prices fell 4.7% to $68.35 a barrel. Meanwhile, Brent crude fell 4.4% to $71.66. According to the report, the dollar weakened against the yen, which fell from 149.28 to 146.64 as investors sought shelter for shelter.

Asian and European stock markets reportedly follow Wall Street’s slideshow. Japan’s Nikkei 225 fell 2.8%, Germany’s DAX fell 2.4%, and France’s CAC 40 fell 2.7%. Stocks fell 1.1% amid Thailand’s target tariff of 36% and analysts say the price increase will have a huge impact on Thailand’s exports.

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Investors also want to seek massive economic data issuances, such as U.S. non-agricultural wages and Friday speech by Fed Chairman Jerome Powell, giving you a glimpse into future monetary policy courses, the report added.

FAQ

What causes the sharp decline in US treasury production?
U.S. fiscal yields plummeted as investors chased safe haven assets triggered by Trump’s extensive tariff announcements, causing threats from a global trade war and subsequent economic slowdowns.

What impact will tariffs have on the global economy?
Tariffs could lead to slowing global economic growth, increasing inflationary pressures and disrupting supply chains. Some analysts predict that in 2025, U.S. GDP growth may be below 1%.