Traders work on the floor of the New York Stock Exchange (NYSE) on March 07, 2025 in New York City.
U.S. Treasury yields fell sharply on Thursday after President Donald Trump unveiled sweeping "reciprocal tariffs," which raised concerns about the possibility of a global trade war and sparked a major flight to safety away from risk assets.
The 10-year Treasury yield dropped 15 basis points to 4.045%, touching levels not seen since October. The 2-year Treasury yield shed 20 basis points to trade at 3.704%.
One basis point equals 0.01%. Yields and prices move in opposite directions.
The tariff measure signed by Trump sets a baseline tariff of 10% across the board, which will take effect April 5. It also includes a slew of steep tariff rates on more than 180 countries and territories, including 34% on China, 20% on the European Union, 46% on Vietnam and 32% on Taiwan.
Get top local stories in San Diego delivered to you every morning. Sign up for NBC San Diego's News Headlines newsletter.
"We will charge them approximately half of what they are and have been charging us," Trump said in a press conference from the White House Rose Garden. "So, the tariffs will not be a full reciprocal."
That halved figure includes "the combined rate of all their tariffs, nonmonetary barriers and other forms of cheating," he added.
"Even if tariffs are ultimately reduced by year-end, the near-term shock and associated uncertainty is likely to drive a near-term slowdown in the U.S. economy and reduce full-year 2025 growth to closer to or below 1%. We would also expect the Federal Reserve to deliver 75-100bps of rate cuts over the remainder of 2025," Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note.
Money Report
Risk assets took a beating while bond prices rallied. The Dow Jones Industrial Average was down more than 1,500 points at one point, while the S&P 500 was headed for its worst daily decline since 2022.
