U.S. Treasury bond yields rose moderately, helped by cautious optimism about the tariff policy.
The yield on 5-year Treasury bonds increased by 2.1 basis points, reaching 4.114%, while the yield on 30-year bonds was 4.691% (+3.5 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, increased by 1.7 basis points to 4.054%, while the yield on 10-year bonds increased to 4.358% (+2.7 basis points).
Yesterday, US President Donald Trump said that not all of his threatened levies would be imposed on April 2 and some countries may get breaks. He added that tariffs might be more limited in scope and sector-specific duties may be postponed. Investor attention will now be on the size of the reciprocal tariffs to be announced next week as well as which countries will be targeted by the Trump administration.
Today, market participants will analyze data on the housing market and consumer confidence, and the major data release of the week will be the Fed's preferred measure of inflation, the personal consumption expenditures index, on Friday. Consensus estimates suggest that new home sales rose to 0.68 million in February from 0.657 million in January, while the consumer confidence index fell to 94.0 in March from 98.3 in February. Overall, experts believe that U.S. real economy data to continue to look decent through March, but since it will reflect the state of the economy before the tariffs were imposed, it will be necessary to wait for data for April or May to get a real picture of the economy.