SINGAPORE- US Treasury yields fell on Monday and the two-year yield sank to a multi-year low as worries of a possible recession in the world’s largest economy grew and investors wagered that could see US rates cut as early as May.
Markets were set for another week of turmoil as fears of a global trade war saw Wall Street futures plunge in early Asian trade, sparked huge currency volatility and sent US yields sliding.
The two-year US Treasury yield which typically reflects near-term rate expectations, tumbled more than 20 basis points to its lowest level since September 2022 at 3.4350 percent, as investors ramped up bets of more aggressive Federal Reserve easing this year.
The benchmark 10-year yield last stood at 3.9158 percent, languishing near Friday’s six-month low of 3.8600 percent.
Futures now point to nearly 120 bps worth of Fed cuts by December and markets swung to imply a roughly 60 percent chance the US central bank could ease rates in May, as policymakers seek to shore up growth in the world’s largest economy on the back of President Donald Trump’s latest tariff salvo.
More than 50 nations have reached out to the White House to begin trade talks since Trump rolled out sweeping new tariffs.
