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Treasuries Are Flattening Out as the Tariff Era Kicks Off
Stocks are solidly falling, but Treasuries saw a more muted reaction early Monday morning.
The yield on the 2-year Treasury, an interest rate-sensitive benchmark, rose by 0.033 percentage points, while the 10-year benchmark yield fell by a similar amount. The inverse reaction makes sense.
Investors in shorter-term securities see future rate cuts by the Fed less likely as tariffs threaten to reignite inflation–both mean the yield on shorter-term notes should be higher. Rising yields indicate bonds are getting sold off at lower prices.
