The 10-year Treasury yield slipped on Friday as investors weighed the latest developments on the global trade front, including new comments from U.S. President Donald Trump.
The benchmark 10-year Treasury yield shed nearly 5 basis points to 4.258%, while the 2-year Treasury yield was 3 basis points lower at 3.76%.
One basis point equals 0.01%. Yields and prices move in opposite directions.
Comments from an interview with Trump were published by Time magazine on Friday. The president said he would consider it a “total victory” if the U.S. imposed high tariffs of 20% to 50% on foreign countries one year from now. Trump also denied that rising bond yields forced his hand in granting a 90-day pause on most of the higher tariff rates.
“The bond market was getting the yips, but I wasn’t,” Trump said in the interview on Tuesday that was first published Friday.
The comments appeared to dampen sentiment toward the economic outlook after the U.S. signaled earlier this week a softer stance on U.S.-China trade. Further weighing on sentiment Friday were comments made by Trump to reporters on Air Force One that he wouldn’t drop tariffs on China unless “they give us something.”
The market was encouraged earlier this week by what appeared to be a softer stance by the administration.
On Tuesday, Trump said the tariff rate will “come down substantially. But it won’t be zero.” Separately, Treasury Secretary Scott Bessent said “there is an opportunity for a big deal here” on trade between the two countries. However, China has been denying that there are ongoing trade talks with the U.S, saying the U.S. must drop all tariff measures if it wants to resolve the matter.
Adding to this week’s bond market unease, Trump on Monday called Federal Reserve Chair Jerome Powell a “major loser,” as he urged the central bank leader to lower interest rates.
That briefly stoked concerns that Trump might fire Powell and challenge the U.S. central bank’s independence. However, Trump said he has “no intention” of firing Powell, putting aside that concern for the time being.
Treasury yields have recently seen wild swings, with the benchmark 10-year note yield dropping from 4.66% in mid-February to 3.86% on April 4, and then surging as high as 4.59% on April 11.
The back and forth on policy shifts has also raised concern over U.S. dominance on the global stage.
London-based strategists at Deutsche Bank said their view “is that the damage to U.S. exceptionalism will be longer lasting, but that it’s understandable that there’ll be a relief recovery after the U.S. has come back from the brink policy wise.”
