US Treasuries Fall on Signs That Trump Will Dilute April Tariffs

Alice Gledhill

Mon, Mar 24, 2025, 3:54 AM 3 min read

(Bloomberg) -- US Treasuries fell, a sign that investors are favoring riskier assets, after reports that the tariffs President Donald Trump is set to announce next month will be more targeted than he has indicated.

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The yield on the 10-year note rose as much as four basis points to 4.29%. German bonds also fell modestly, with the equivalent rate climbing three basis points to 2.80%, snapping five straight days of gains.

The moves follow reports that Trump’s announcement of universal, reciprocal trade tariffs on April 2 — a date he’s referred to as “liberation day” — will be narrower than initially expected. That’s helping temper some of the market’s fears about the impact on global trade and growth.

“The latest news regarding reciprocal tariffs is mildly positive for risk sentiment at the start of this week,” said Kathleen Brooks, research director at XTB.

“Tariffs in Trump’s second term as President are still broader compared to his first term, and they continue to weigh on markets,” she added. “However, the selloff in US equities, particularly in big tech, could reverse if markets have overestimated the risk from tariffs on global trade.”

Trump Plans His Tariff ‘Liberation Day’ With More Targeted Push

US 10-year Treasuries have traded in a fairly narrow range through March after the yield retreated from the year’s high of about 4.80% in mid-January. Trump’s tariff and trade-war threats sparked fears of a recession, pushing investors out of stocks and into the safety of bonds.

Despite Monday’s weakness, investors including Nicolas Jullien, global head of fixed income at Candriam, expect US yields to retreat further as indicators show confidence in the nation’s economy is eroding. The US Purchasing Managers’ Index will give a fresh look at private business activity later Monday.

“Surveys are also seeing downtrends as trade uncertainty is peaking and impacting investor confidence,” Jullien said. “We do see a downward trend on US 10-year rates and in the event of a risk-off scenario brought on by a continued downturn in markets.”

Reinforcing that view is Treasury Secretary Scott Bessent’s campaign to push down bond yields, which has led some rates strategists at major banks to cut their year-end forecasts.