NEW YORK- US Treasury yields fell on Monday with those on interest-rate-sensitive 2-year notes on track for their largest daily drop since September after US President Donald Trump declined to rule out a recession as a result of his tariff policies.
In an interview, Trump declined to predict whether the US could face a recession amid stock market concerns about his tariff actions on Mexico, Canada and China, saying that “there is a period of transition.”
US Treasury Secretary Scott Bessent said on Friday that the US economy may slow as it moves away from public spending toward more private spending, calling it a “detox period” needed to reach a more sustainable equilibrium.
“If the occupant in the White House is himself not terribly optimistic about short-term growth expectations, why should the market be optimistic about it?” said Will Compernolle, macro strategist at FHN Financial.
“If they are willing to look through what they see as short-term pain, the detox, then there’s an even bigger risk that, after the detox, they don’t really have the capability to stop a downturn before it’s too late.”
