The bond market sell-off that spurred President Trump’s midweek reversal on tariffs is pushing into Friday, with yields on the 10-year Treasury bond reaching nearly 4.6-percent, the highest level since February.
The 2-year Treasury bond yield was close to 4 percent, the 5-year was above 4.2 percent and the long-term 30-year Treasury stood at just about 5 percent.
The 30-year bond yield moved up at the fastest pace in years, an ascent that economists were paying attention to.
“The 30-year Treasury yield experienced the biggest increase since 1982,” UBS economist Paul Donovan wrote Friday regarding its overnight movements.
Meanwhile, the dollar is losing value against world currencies and the price of gold is increasing.
The dollar was down 1 percent in midday trading against the Euro and more than 3 percent on the week.
Against the pound, the dollar was down more than half a percent on the day and more than 1 percent on the week. Movements were similar against the yen.
Gold prices were up more than two-and-a-quarter percent and nearly 8 percent on the week after rising steadily since Trump’s “Liberation Day” tariffs were first announced last Wednesday.
Trump then paused much of those tariffs on Wednesday afternoon, while keeping a flat 10 percent tariff on imports from most of the world and increasing triple-digit tariffs on Chinese imports.
Stock markets reacted to the pause favorably on Wednesday with a rally, but gave up a portion of those gains on Thursday. Equity markets were mixed on Friday.
President Trump and his economic advisers have indicated that the initial Wednesday sell-off in the Treasury market hastened their decision to pause much of Trump's reciprocal tariffs.
“There’s no doubt that the Treasury market yesterday made it so that the decision – it was about time to move – was made with perhaps a little more urgency,” Kevin Hassett, head of the National Economic Council, said on Thursday.
While Trump issued a 90-day pause on his country-specific tariffs on Wednesday, he left his 10-percent general tariff in place while increasing the overall tariff on China to 145 percent.
China raised tariffs on the U.S. on Friday to 125 percent as the economic tensions between the two countries flared to the highest levels in years.
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