U.S. Treasury yields edged higher Tuesday following reports that President Donald Trump’s tariffs might be more limited in scope and sector-specific duties may be postponed.
The benchmark 10-year Treasury note yield was nearly two basis points higher at 4.346%, with the 2-year Treasury over one basis point higher at 4.051%
One basis point is equivalent to 0.01%. Yields and prices have an inverted relationship.
The White House’s planned tariffs set for April 2 are expected to be more narrow in scope, according to reports from The Wall Street Journal and Bloomberg. Trump also on Friday suggested some “flexibility” for his reciprocal tariff plans for trading partners.
Investors are expecting later on Tuesday the S&P CoreLogic Case-Shiller home price for January, which tracks changes in residential home prices. The major data release of the week will be the Fed’s favored measure of inflation, the personal consumption expenditures index, on Friday.
The PMI released on Monday showed a reading of 54.3, above the 51.5 consensus estimate from Dow Jones and up from 51 in February. A reading above 50 signals expansion, while a reading below 50 indicates contraction.
“Our bias is to expect U.S. real economy data to continue to look decent through March, challenging recently bearish equity market sentiment,” Eastspring Investments wrote in a note published Tuesday.
However, Eastspring Investments’ economists noted that the data are largely pre-tariffs, and that hard data will only begin to reflect the post-tariff economy from April and May onwards.