U.S. Treasury yields dropped again on Monday as President Donald Trump’s tariffs spurred a flight to safety while riskier markets took a hit.
At 5:15 a.m. ET, the 10-year Treasury yield fell over 5 basis points to 3.936%. The 2-year Treasury yield dropped over 16 basis points to 3.52% and hit its lowest level since September 2022.
One basis point equals 0.01%, and yields and prices move in opposite directions.
Investors are reeling from the impact of the Trump’s tariffs last week, which hit over 180 countries and set a baseline tariff of 10% across the board. Major trading partners of the U.S. took some of the steepest tariffs, with China facing a total tariff rate of 54%.
The tariffs have stoked fears of a global trade war, as countries respond with their own tariffs on the United States. China retaliated Friday by slapping 34% tariffs on U.S. goods, and the EU has vowed to impose countermeasures if negotiations fail.
Investors were hoping to see some opportunity for negotiation with the U.S. to bring down tariffs, but Treasury Secretary Scott Bessent told NBC News that despite 50 countries approaching Trump’s administration for negotiations, “they’ve been bad actors for a long time, and it’s not the kind of thing you can negotiate away in days or weeks.”
Trump continued to downplay the impact of tariffs, saying on Sunday evening, “I don’t want anything to go down, but sometimes you have to take medicine to fix something.”
Stock futures took a big hit Monday, with contracts tied to the Dow Jones Industrial Average dropping more than than 1,300 points. Equity markets across Asia and Europe were also under pressure in overnight trading.
