U.S. Treasury Yields Rise as Hopes of Trade War Easing Boost Investor Confidence

U.S. Treasury yields increased on Monday, driven by growing optimism that President Donald Trump’s stance on trade tariffs may be softening, alleviating fears of an all-out trade war. The benchmark 10-year Treasury note yield climbed more than eight basis points to 4.338%, while the 2-year Treasury yield also rose over nine basis points to 4.041%. The news spurred investor confidence, boosting hopes that the U.S. economy can continue its expansion.

Reports from The Wall Street Journal and Bloomberg News indicated that the White House’s planned tariffs set for April 2 could be narrower in scope, potentially excluding some industry-specific duties. This development came after Trump hinted at “flexibility” in his tariff strategy, suggesting that exceptions could be made for certain trading partners. This shift in rhetoric has reassured markets, leading to an increase in Treasury yields.

In his remarks, Trump acknowledged that while he remains firm on his reciprocal tariff approach, he was open to adjustments based on feedback from industries, which could provide relief for sectors potentially impacted by the tariffs. Investors reacted positively to this more conciliatory tone, fueling hopes of a less aggressive trade conflict with key partners like China.

Looking ahead, markets are also awaiting important economic data releases this week. Investors are particularly focused on the PMI report, which showed growth in the manufacturing sector, as well as upcoming figures on new home sales, jobless claims, and the personal consumption expenditures index. These data points will provide further insights into the strength of the U.S. economy and potential inflation trends.

source: cnbc