US Treasury yields continued to drift upwards on Monday, with the benchmark 10-year touching its highest level in six days as investors reacted to reports that President Donald Trump could soften the hit from a tranche of tariffs expected next week, adding to gains seen on Friday.
Trump said on Monday he might give a “lot of countries” breaks on tariffs and that he plans to announce more tariffs on automobiles in the next few days. This followed earlier media reports that the tariffs’ hit could be softer than feared.
The comments sent stocks sharply higher and flushed investors from safer bonds, pushing prices down and yields up in a classic risk-on scenario.
Trump had anticipated applying reciprocal levies starting on April 2 but sector-specific tariffs are now not likely to be announced that day, according to media reports over the weekend citing administration officials. Trump on Friday also said there would be some flexibility regarding reciprocal tariffs, which pushed stocks and Treasury yields higher.
If implemented fully, the new round of tariffs aremostly expected to drive inflation higher and hurt economic growth, so the prospect of more targeted import duties offered some relief.
