(Jan 21): Treasuries rallied as fears that Donald Trump’s policies will fuel inflation eased, after the US president refrained from imposing China-specific tariffs for now.
The 10-year US yield fell as much as 10 basis points to 4.53% on Tuesday, as the market reopened after a US holiday. Meanwhile, the dollar rallied as Trump said he still plans to impose 25% tariffs on Mexico and Canada from next month, which sent currencies from both countries tumbling over 1%.
The volatility in markets is a glimpse of the months to come as the new administration changes policies at speed. Running up to the inauguration, US bonds sold off aggressively on fears sweeping tariffs and tax cuts would drive up US inflation, while reports on Trump’s intended policies triggered wild swings in assets worldwide.
“We expect further declines in Treasury yields,” said Mark Haefele, the chief investment officer of UBS Global Wealth Management,…
