📉 US Treasury Yields Set for Monthly Loss as Markets Eye Fed Inflation Data

Yields held steady Friday, but calm on the surface doesn’t mean smooth sailing.

📊 The 10-year yield stayed flat at 4.422%, the 30-year edged up slightly to 4.927%, and the 2-year remained at 3.939%.

💼 Meanwhile, Trump scored a legal win to keep reciprocal tariffs alive — with the court pausing a previous ruling against them. His team also has a backup plan: using the Trade Act of 1974 to push temporary tariffs of up to 15% for 150 days. 🇺🇸💣

📈 Markets are tense ahead of key inflation data, especially the PCE index — the Fed’s favorite metric.

If inflation cools, rate cut hopes might heat up 🔥, with markets pricing in 50 bps of cuts by year-end.

📉 But for now, May is shaping up to be rough for Treasuries:

• Bloomberg’s US bond index is down 1.2%

• The 30-year yield is on its third straight monthly rise — the longest streak since 2023

• 2-year and 10-year yields just marked their first monthly gains of 2025

💬 Many investors blame Trump’s tax cut plans and rising deficit fears for the bond selloff. Others worry that the ballooning supply of US debt could overwhelm demand — especially if foreign buyers pull back. 🌍💸

🏦 Goldman Sachs warns that high debt levels, not tariffs, are rattling markets more.

📉 Citigroup expects the term premium to rise another 50 bps as investors demand more for holding long-term bonds.

📊 Man Group highlights that the spread between real yields and fair value is tighter than it’s been in decades — a sign that confidence in the dollar may be slipping. 🪙⚠️

🔍 Bottom line: The market may look quiet, but pressure is building. Keep your eye on inflation data — and brace for more volatility ahead. 📊⚠️

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