US Treasuries: Yields tick higher ahead of Easter long weekend

NEW YORK: Yields on US Treasuries edged higher in uneventful pre-holiday trade on Thursday, wrapping up an abbreviated week on a calmer note after President Donald Trump’s early April tariff flip- flops nearly blew up the bond market.

Trade wrapped up early ahead of Good Friday, when many exchanges around the world are closed. US trading resumes Monday but some markets remain closed to commemorate Easter.

The yield on the benchmark US 10-year Treasury note rose 5.2 basis points (bp) from late Wednesday to 4.331%. The two-year yield, which typically moves in step with interest rate expectations, rose 2.1 basis points to 3.807%, changing direction after dipping to 3.758%, an eight-day low.

Federal Reserve Bank of New York President John Williams said Thursday he sees no imminent need for a change in central bank interest rate policy as Trump administration tariffs are likely to drive up inflation, weaken growth and push up unemployment.

His comments echoed those of Fed Chair Jerome Powell, who told the Economic Club of Chicago a day earlier that the US central bank would wait for more data on the economy’s direction before changing interest rates, noting that there was a potentially tough situation developing for the Fed in which inflation is pushed higher by tariffs while growth and potentially employment weaken.

Trump got little market reaction after posting on his Truth Social social media platform early on Thursday that Powell’s termination “cannot come fast enough.” He called for the US central bank to cut interest rates, the sort of pressure that Powell on Wednesday pledged to resist as the Fed grapples with an outlook complicated by Trump’s own policies.

Later on Thursday Trump said he believes the Fed chairman will leave his job if he asks him to do so, telling reporters he was not happy with Powell.

“He has called for Powell’s departure a few times now,” noted Ross Bramwell, market strategist at Homrich Berg in Atlanta. “But I don’t believe that President Trump would make that move at this time. He would get some pushback from other Republicans in the Senate and the House…even public opinion would probably go against as most people have confidence in the market because of an independent Fed.”