The 10-year Treasury yield has tumbled by 10.9 bps to a five-week low following a slew of new reciprocal tariffs and a concerning labor market report. The 10-year bond is viewed as a safe-haven asset, and its yield has an inverse relationship with its price. Today’s falling yield indicates rising appetite for bonds amid an uptick in economic uncertainty.
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On Thursday, President Trump issued dozens of new reciprocal tariffs, including a 35% tariff on India, a 25% tariff on Japan, and a 39% tariff on Switzerland. The rates ranged between 10% and 41%, with Syria receiving the top rate.
Nonfarm Payrolls Report Disappoints
Adding on to the tariffs is July’s disappointing nonfarm payrolls data. The U.S. added 73,000 nonfarm payrolls in July while economists were expecting 104,000 additions. Making matters worse, May’s nonfarm payrolls were revised lower by 125,000 jobs to 19,000 and June’s figure was reduced by 133,000 jobs to 14,000.
“The July jobs report was much weaker than expected and raises the odds of a Fed rate cut in September,” said Oxford Economics lead economist Nancy Vanden Houten.
Track the 10-year Treasury yield and other key economic metrics with TipRanks’ Economic Indicators Dashboard.
