US 10-Year Treasury Yield Spikes Sharply to Over 4.36%
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10-yr US Treasury yield hits 1-mo high (4.36%) amid tariff hike, inflation fears Yield surge challenges Fed rate cut hopes; foreign buying concerns (China) mount Context: Bond market reprices risks (tariffs, supply, demand) vs prior rate optimism Renewed US-China trade tensions under the Trump administration, dubbed by some as “Tariff War 2.0,” coincided with a sharp rise in the benchmark 10-year U.S. Treasury yield this week. The yield climbed to 4.36%, reportedly jumping significantly in just two days to reach its highest level in over a month. The spike suggests increased borrowing costs and growing investor unease regarding inflation and the large supply of government debt hitting the market. Why Are Yields Suddenly Rising? The yield surge also marks a shift in investor sentiment after weeks of relative calm in the bond market. Stubborn inflation fueled bets on the Federal Reserve keeping rates higher for longer, contributing to upward pressure on yields. Traders are now reassessing the timeline for potential Fed rate cuts, which had been aggressively priced in just weeks ago. Related: ‘Ignore China At Your Peril’: Ben Zhou Flags Yuan Devaluation’s BTC Impact Strong Demand, High Yields at US Treasury Auction Adding to the pressure, the U.S. Treasury Department held a $58 billion auction of three-year notes Tuesday – the first major debt issuance since the latest tariff news. While demand appeared reasonably strong, the auction cleared at an elevated yield, suggesting that investors are demanding more compensation to hold U.S. debt in a volatile macro environment. The prospect of higher import costs from the additional tariffs also influenced inflation forecasts. Related: BlackRock CEO Sees Economy Weakening, Warns Trump’s Actions Could Ignite Inflation Are Foreign Buyers Stepping Back? Concerns are also mounting that key foreign buyers, especially China and Japan, could be reducing their U.S. debt holdings. China…
Filed under: News - @ April 9, 2025 11:21 pm