US 10-Year Treasury Yield Rebounds

The US 10-year Treasury yield climbed back above 4.1% on Monday, rebounding slightly from a six-month low after dropping around 26 basis points last week.

Investors continued to monitor escalating trade tensions and their potential impact on the global economy, while increasing their bets on Federal Reserve rate cuts.

Market sentiment received a temporary boost following reports that President Trump was considering a 90-day tariff pause for all countries except China.

However, the White House quickly dismissed the report as false.

Adding to the uncertainty, Trump threatened to impose a new 50% tariff on Chinese imports if Beijing fails to lift its retaliatory duties.

Traders are now pricing in roughly four quarter-point cuts to the federal funds rate this year, with the first fully expected in June.

Meanwhile, markets see only a slim chance of the Fed acting before its next scheduled policy meeting.