US Treasury Yields Drop Amid Trade War Fears

In a dramatic response to the United States' latest tariff imposition, China has announced a new 34% tariff on all US goods. This move comes directly after President Donald Trump introduced a similar 34% trade duty on Chinese products, escalating tensions between the two economic powerhouses.

Investors Seek Safe-Haven Assets

The Chinese Ministry of Commerce didn't stop at tariffs; it also imposed sanctions on 11 American companies and 16 US-based entities. This aggressive stance has spooked investors, leading to a flight to safety amidst growing fears of a global recession.

Impact on US Government Bonds

The immediate effect was seen in the US Treasury markets, where yields tumbled. The 2-year bond yield fell by 12.2 basis points to 3.578%, while the 10-year yield dropped by 11.3 basis points to 3.92%. Similarly, the 30-year bond yield declined by 11.3 basis points to 4.364%, reflecting the market's nervousness.