2-year Treasury yield drops below 2% as tariff threat sparks global bond rally

Government bonds rallied sharply Friday, sending yields sharply lower, as investors sought havens following President Donald Trump’s threat to levy tariffs on Mexico in an effort to curb immigration. The yield on the 2-year U.S. Treasury note TMUBMUSD02Y, -3.52% dropped more than 7 basis points to 1.992%, dropping below the 2% threshold for the first time since February 2018, according to FactSet. The 10-year Treasury note yield TMUBMUSD10Y, -2.05% tumbled 7.2 basis points to 2.151%, the lowest since September 2017. Yields fall as debt prices rise. The move was a global phenomenon, with the yield on the 10-year German government bond, or bund, falling deeper into negative territory. The bund yield was down more than 4 basis points at negative 0.21%. The tariff threat underlined worries about economic growth, analysts said, sending global equity markets skidding, with U.S. stock index futures pointing to sharp losses for Wall Street when markets open Friday. S&P 500 futures ESM19, -1.11% were off 33.65 points, or 1.2%, at 2,756.75, while futures on the Dow Jones Industrial Average YMM19, -1.16% fell 283 points, to 1.1%, to 24,907. Heightened trade tensions with China have been blamed in part for a May downturn that’s seen the S&P 500 SPX, -1.00% and Dow DJIA, -1.05% each fall more than 5% in the month-to-date through Thursday.

See Full Story 2-year Treasury yield slumps to 2% after Trump wields tariff threat against Mexico

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