U.S. 10-year Treasury yields rise as tariffs concern investors

U.S. Treasury yields rose slightly on Friday, remaining within a narrow range. Investors are trying to understand how new tariffs will affect inflation and economic growth. Concerns include potential layoffs from federal jobs, which could increase unemployment. Despite these worries, recent economic data has not yet shown significant effects from the new tariff policies. Federal Reserve officials are taking a cautious approach. Fed Chair Jerome Powell noted that the current environment is unusually uncertain. New York Fed President John Williams expressed that it’s too early to gauge how tariffs will impact inflation levels. President Donald Trump mentioned plans for his trade chief to talk with Chinese officials next week. He affirmed his intention to reduce the U.S. trade deficit with tariffs but indicated flexibility in their application. Meanwhile, the bond market remains optimistic because of the Fed's decision to slow its balance sheet reduction. The yield on the 10-year Treasury note increased by 2.1 basis points to 4.254%. This yield has fluctuated between 4.106% and 4.353% since late February. In Europe, Germany's parliament approved a significant spending plan aimed at boosting its economy. This development has caused an increase in government debt yields globally. Additionally, the U.S. plans to sell $183 billion in short- and intermediate-term debt next week, which includes two-year and five-year notes.