Treasury yields slid Monday, continuing its recent streak of wild swings as investors navigate the global trade minefield.
The benchmark 10-year Treasury dropped 11 basis points to trade at 4.38%. The 2-year Treasury yield slipped 11 basis points to 3.843%.
One basis point is equal to 0.01% and yields move inversely to prices.
President Donald Trump announced over the weekend that smartphones, computers, electronic devices and components including semiconductors are exempt from reciprocal tariffs.
The White House said late Friday that the exemptions were made because Trump wants to ensure that companies have time to move production to the U.S. However, Trump suggested on Sunday that the exemptions aren’t permanent.
The moves come after a week of unusual volatility in the bond market, with the 10-year yield rising more than 50 basis points — one of the biggest two-day increases on record. Yields continued to rise even after Trump announced a 90-day tariff pause on goods from other countries last week. While the 10-year yield briefly dipped on the news, it still scaled back above 4.5% on Friday.
Once a safe haven asset, some traders are now speculating whether foreign investors including Japan and China will dump their Treasury holdings.
10-year Treasury note yield since last week
Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, told CNBC that he hasn’t seen direct evidence that foreign investors are dumping Treasurys, but the fear alone is enough to move the market.
“Markets are very confidence-driven. Even the perception that foreign investors are trying to step away from Treasury markets can trigger pretty significant panic,” Goldberg said.
