Latest news with #TNX
Yahoo
2 days ago
- Business
- Yahoo
Surging yields are spooking investors. One strategist sees Trump administration as 'bond vigilant.'
Long-term Treasury yields have climbed in recent weeks, driven by growing concerns over the trajectory of US debt as President Trump's proposed tax legislation advances to the Senate after clearing the House. New concerns emerged late Wednesday after a Manhattan-based trade court struck down a wide swath of Trump's tariffs, adding to uncertainty around how the administration will manage the deficit. "The tariffs the court struck down were likely to raise nearly $200 billion on an annual basis," Goldman Sachs said in a note to clients late Wednesday. That's "roughly the amount the fiscal package would increase the deficit next year." Yields ticked higher in the immediate aftermath of the news before falling slightly on Thursday. In afternoon trade, 10-year (^TNX) hovered near 4.43% while the 30-year (^TYX) traded around 4.94%. Read more: What is the 10-year Treasury note, and how does it affect your finances? As bond markets digest the latest policy whipsaw, one strategist says investors may be underestimating just how actively the administration is working behind the scenes to manage long-term borrowing costs. Tim High, senior rates strategist at BNP Paribas, described the Trump team as "bond vigilant — a counterweight to the so-called bond vigilantes in the market," suggesting the administration is acutely aware of the risks that higher yields and a rising term premium pose to fiscal stability. High pointed to previous comments from Treasury Secretary Scott Bessent, who emphasized the administration is more focused on 10-year yields than on short-term Federal Reserve policy. That matters, he said, because longer-term rates, especially the 10-year, have a bigger impact on the real economy, shaping consumer borrowing costs like mortgage rates. Plus, the administration has tools to keep those yields in check. One option under discussion is easing bank capital rules, which would make it easier for institutions to hold more Treasurys. Another is adjusting how the government issues debt, leaning more on short-term bills rather than longer-dated bonds, to reduce upward pressure on long-term rates. Together, these moves signal the administration is not only watching the bond market but may be willing to act to shape it. That vigilance, High said, stems from more than just concern over rising interest payments on the national debt. Elevated long-term rates also threaten to blunt the effects of any future Fed rate cuts. In other words, even if the Fed lowers short-term interest rates to stimulate the economy, it may not have the desired impact if 10-year yields, which heavily influence mortgage and business borrowing, stay high. Therefore, the administration's focus on the long end of the curve reflects a broader awareness: Without lower long-term rates, it becomes harder to deliver meaningful economic support. Still, BNP doesn't see yields running away from here. Despite sticky inflation and the possibility that the Fed stays on hold for longer, the firm expects 10-year yields to remain relatively stable through the third quarter, with a modest drift lower into year-end. The bank forecasts the 10-year yield to finish 2025 around 4.25%. BNP also doesn't expect any Fed rate cuts this year, citing inflationary concerns, multiple policy uncertainties, and a still-solid growth backdrop. If that scenario plays out, the combination of stable long-term yields and a mostly on-hold Fed could flatten the yield curve more than markets currently expect. And for a bond-conscious White House increasingly focused on long-term borrowing costs, that kind of outcome would be welcome. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at
Yahoo
2 days ago
- Business
- Yahoo
Surging yields are spooking investors. One strategist sees Trump administration as 'bond vigilant.'
Long-term Treasury yields have climbed in recent weeks, driven by growing concerns over the trajectory of US debt as President Trump's proposed tax legislation advances to the Senate after clearing the House. New concerns emerged late Wednesday after a Manhattan-based trade court struck down a wide swath of Trump's tariffs, adding to uncertainty around how the administration will manage the deficit. "The tariffs the court struck down were likely to raise nearly $200 billion on an annual basis," Goldman Sachs said in a note to clients late Wednesday. That's "roughly the amount the fiscal package would increase the deficit next year." Yields ticked higher in the immediate aftermath of the news before falling slightly on Thursday. In afternoon trade, 10-year (^TNX) hovered near 4.43% while the 30-year (^TYX) traded around 4.94%. Read more: What is the 10-year Treasury note, and how does it affect your finances? As bond markets digest the latest policy whipsaw, one strategist says investors may be underestimating just how actively the administration is working behind the scenes to manage long-term borrowing costs. Tim High, senior rates strategist at BNP Paribas, described the Trump team as "bond vigilant — a counterweight to the so-called bond vigilantes in the market," suggesting the administration is acutely aware of the risks that higher yields and a rising term premium pose to fiscal stability. High pointed to previous comments from Treasury Secretary Scott Bessent, who emphasized the administration is more focused on 10-year yields than on short-term Federal Reserve policy. That matters, he said, because longer-term rates, especially the 10-year, have a bigger impact on the real economy, shaping consumer borrowing costs like mortgage rates. Plus, the administration has tools to keep those yields in check. One option under discussion is easing bank capital rules, which would make it easier for institutions to hold more Treasurys. Another is adjusting how the government issues debt, leaning more on short-term bills rather than longer-dated bonds, to reduce upward pressure on long-term rates. Together, these moves signal the administration is not only watching the bond market but may be willing to act to shape it. That vigilance, High said, stems from more than just concern over rising interest payments on the national debt. Elevated long-term rates also threaten to blunt the effects of any future Fed rate cuts. In other words, even if the Fed lowers short-term interest rates to stimulate the economy, it may not have the desired impact if 10-year yields, which heavily influence mortgage and business borrowing, stay high. Therefore, the administration's focus on the long end of the curve reflects a broader awareness: Without lower long-term rates, it becomes harder to deliver meaningful economic support. Still, BNP doesn't see yields running away from here. Despite sticky inflation and the possibility that the Fed stays on hold for longer, the firm expects 10-year yields to remain relatively stable through the third quarter, with a modest drift lower into year-end. The bank forecasts the 10-year yield to finish 2025 around 4.25%. BNP also doesn't expect any Fed rate cuts this year, citing inflationary concerns, multiple policy uncertainties, and a still-solid growth backdrop. If that scenario plays out, the combination of stable long-term yields and a mostly on-hold Fed could flatten the yield curve more than markets currently expect. And for a bond-conscious White House increasingly focused on long-term borrowing costs, that kind of outcome would be welcome. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Dollar steadies, Treasurys drop as Trump faces tariff setback
(Bloomberg) — A gauge of the dollar (DX=F) briefly rose to a more than one-week high and Treasuries fell as investors reacted to news that the vast majority of President Donald Trump's global tariffs were deemed illegal by the US trade court. NYC Congestion Toll Brings In $216 Million in First Four Months NY Wins Order Against US Funding Freeze in Congestion Fight NY Congestion Pricing Is Likely to Stay Until Year End During Court Case Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania The currency strengthened as much as 0.4% on Thursday, before erasing most of its advance following the US Court of International Trade in Manhattan's ruling that Trump wrongfully invoked an emergency law to justify the levies. The White House said it will appeal the decision. Goldman Sachs Group Inc. (GS) analysts said the judgment represents only a temporary setback to Trump's trade agenda and can be offset by other taxes. 'For markets, it's a small deviation along the same path, same end goal. Tariffs are coming,' said Jordan Rochester, head of macro strategy for EMEA at Mizuho International Plc. 'But on the margin, this pushes back on the consensus bearish dollar theme through a potential pick up in US growth expectations and so we may see some short covering.' The dollar index has tumbled more than 7% since a February high as the trade war hurt sentiment toward US assets and fueled a re-think of the world's reliance on the reserve currency. The court decision may allay some market jitters for now on just how far US tariffs could upend global trade and growth. The yen and Swiss franc led losses against the dollar in Asian trading, as improved risk sentiment damped demand for traditional havens. The moves faded after the European open, even as rates markets held their direction. Yields on 10-year US Treasuries (^TNX) rose five basis points to 4.53%, while two-year yields climbed as much as six basis points to around 4.05% before trimming gains. The court decision suspends the vast majority of Trump's tariffs: the global flat tariff, elevated rates on China and others, and fentanyl-related tariffs on China, Canada and Mexico are all covered by the ruling. But other tariffs imposed under different powers are unaffected, including those on steel, aluminum and automobiles. Virginie Maisonneuve, global chief investment officer equity, at Allianz Global Investors, said investors should prepare for Trump to resist efforts to disrupt his trade policy agenda. 'I think we have to expect that he's gonna try to do this,' Maisonneuve said on Bloomberg TV. 'But what is really important here is this grassroot movement that we've been waiting for, for a while, in terms of putting a little bit more rationality around those practices.' The ruling offers a welcome moment of relief to investors, but it also adds another source of uncertainty to the global trade dispute that has roiled markets this year. Traders have been forced to digest not just tariffs and counter-tariffs from the US and its rivals, but also a series of delays and reversals by Trump. Now, they are being forced to confront yet another unknown: whether the White House can navigate legal challenges at home. 'Right now there are tariffs, and scope for more after July 9,' said Stephen Spratt, a strategist at Societe Generale in Hong Kong. 'This raises the chance there are no tariffs, but it's so difficult to know how much that chance has changed.' Options traders remain bearish on the dollar over the next year, though with slightly less conviction. So-called one-month risk reversals — which track the difference in demand between bullish and bearish dollar bets — continue to show a preference for downside protection. Data from the Depository Trust & Clearing Corporation reinforce that view. Despite the dollar's sharp rebound in the spot market this week, bearish options positions still outpace bullish ones by approximately $13 billion in notional terms. The euro, the Swiss franc, the Norwegian krone and New Zealand's dollar show the strongest conviction for renewed gains against the greenback, based on the latest flow patterns and positioning metrics. —With assistance from Alice Atkins and Alice Gledhill. (Updates throughout.) Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
S&P 500, Dow, Nasdaq close 0.5% lower ahead of Nvidia results
US stocks (^DJI, ^IXIC, ^GSPC) close Wednesday's session lower by over 0.5% a piece, ahead of Nvidia's (NVDA) long-awaited first quarter earnings results. Market Domination Overtime's Julie Hyman and Yahoo Finance markets and data editor Jared Blikre recap equity and bond market (^TYX, ^TNX, ^FVX) moves from Wednesday. Tune in to Yahoo Finance's special live coverage of Nvidia's first quarter earnings here, beginning at 4:15 p.m. on Wednesday, May 28. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
Yahoo
3 days ago
- Business
- Yahoo
The yield curve is steepening: What it means for equity investors
US Treasury yields (^TNX, ^TYX, ^FVX) are on the decline. ProShares Global investment strategist Simeon Hyman joins Catalysts with Julie Hyman to take a closer look at the bond market and its impact on the stock market (^DJI, ^GSPC, ^IXIC). To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
