Long-term U.S. Treasuries keep flashing warning signs 30-year yields climb again – now at 4.91%

Long-term U.S. Treasuries keep flashing warning signs 30-year yields climb again – now at 4.91%

If you want to get a real sense of how nervous the markets are, look no further than the long end of the yield curve. U.S. 30-year Treasury yields are rising again, putting pressure on overall risk sentiment as the new trading week unfolds.

At this point, traders and investors are gradually losing confidence in the prospect of a quick resolution to the ongoing trade tensions – and U.S. assets are taking a beating because of it.

Just as a reminder: it wasn’t the stock market but the bond market that forced Trump to back down on tariffs recently. But two messy weeks later, we’re more or less back to square one. On April 10th, when 30-year yields also stood around 4.90%, this was the tone:

“As we know, it was the bond market – not the stock market – that made him ease off his reciprocal tariff stance earlier this week.”

And yet, Treasury yields are still climbing – as if the market is kicking and screaming. So what’s next?

We’re basically watching a game of chicken unfold – and the question is, who will blink first: Trump, China, or the Fed?

Given China’s response so far, betting on them to fold first seems unlikely. That leaves a standoff between Trump and the Federal Reserve.

Right now, it’s a tough call. If Powell & Co. step in with emergency bond purchases, we might see short-term relief. But it would also send the message that Trump has a green light to keep pushing his tariff agenda.

The best-case scenario for the markets? Trump backs down once more – ideally with a phone call to Beijing.

Source: www.cnbc.com

Disclaimer:

The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.

There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure (https://www.jfdbrokers.com/en/legal/risk-disclosure).

Copyright 2024 JFD Group Ltd.