FX.co ★ US 10-Year Yield Drops Toward 3.9%

The yield on the US 10-year Treasury note decreased to approximately 3.9% on Monday, reaching a six-month low as President Donald Trump's intensified trade conflict fueled recession concerns, prompting investors to seek refuge in government bonds. Despite market volatility, the White House remained resolute in its stance on reciprocal tariffs, with Trump remarking on Sunday that "sometimes you have to take a medicine to fix something." In response, China imposed a 34% tariff on all US imports on Friday, and other major economies are anticipated to implement similar measures. These developments amplified worries about inflation and economic growth in the US, complicating the Federal Reserve's policy outlook. Nonetheless, markets are still anticipating a 100 basis point reduction in interest rates by the end of the year.