SINGAPORE- US Treasury yields dived to multi-month lows on Thursday as investors poured into safe-havens and ramped up bets of more Federal Reserve rate cuts after US President Donald Trump unleashed larger-than-expected tariffs on the world.
Trump on Wednesday unveiled a 10 percent minimum tariff on most goods imported into the United States, with much higher duties on products from dozens of countries, sending global stocks plunging, currencies in a whirlwind and bonds surging.
The benchmark 10-year US Treasury yield tumbled 15 basis points to a more than five-month low of 4.04 percent in the early Asian session and were last down at 4.072 percent.
Yields move inversely to prices.
The two-year Treasury yield dropped to 3.815 percent, having slid as much as 14 bps to a six-month trough of 3.76 percent.
“Tailwinds are blowing very, very strongly behind Treasuries now – safe-haven flows, fears of a recession and trade war and more Fed rate cuts,” said Tony Sycamore, a market analyst at IG.
“You’re going to see a raft of banks now coming through and saying that the chances of a recession in the US are significantly higher.”
