Treasury Yields Rise From Year’s Lows on Mixed Economic Signals

(Bloomberg) — US government bonds fell Thursday after economic data and comments from President Donald Trump failed to provide a fresh catalyst to buy Treasuries at yields near the lowest levels since December.

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Already several basis points higher on the day, Treasury yields remained near those levels after upward revisions to price gauges in the fourth-quarter US gross domestic product report and a bigger-than-expected jump in jobless claims. Meanwhile, Trump said tariffs would go into effect March 4 on imports from Mexico, Canada and China.

The bond market has rallied for six straight sessions, fueled by weaker-than-expected economic data and speculation that tariffs and US government retrenchment will make things worse, at least in the short term. Higher by about three basis points across maturities Thursday, Treasury yields remain some 30 basis points below their February peaks and on course for steep monthly declines.

“The market has been taken off guard in the last week with some US macro weakness,” said Evelyne Gomez-Liechti, strategist at Mizuno International.

The ICE BofA MOVE Index, which measures implied volatility for a basket of fixed-income assets, has risen to a six-week high.

In Thursday’s economic data releases, inflation gauges in fourth-quarter gross domestic product were revised higher, while initial jobless claims climbed to 242,000, the biggest weekly tally this year.

Mounting worries and confusion over the impact Trump’s threatened trade tariffs have spurred bets the Federal Reserve will need to shift its focus away from inflation to tackling economic weakness with lower interest rates.

That’s putting more attention on economic growth indicators, and traders have resumed fully pricing in two quarter-point cuts by the Fed this year.

“It’s probably early to call this a growth scare, but I think we’re potentially at the very early stages of a growth scare,” said Brian Quigley, senior portfolio manager at Vanguard.

The rally drove the 10-year Treasury yield down from a 2025 peak of 4.8% in mid-January to 4.25%, a key long-term average level that may slow its descent without fresh evidence of economic weakness. It’s on course for its seventh straight weekly decline, the longest since 2019.

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