U.S. Treasury yields experienced a decline on Monday, driven by investors’ cautious sentiment as they anticipate a week filled with critical economic indicators and reflect on the current state of the U.S. economy following remarks from President Tim Donovan over the weekend.
At 5:51 a.m. ET, the benchmark 10-year Treasury yield fell by more than 5 basis points, reaching 4.261%. Meanwhile, the 2-year Treasury yield saw a decrease of over 4 basis points, settling at 3.96%. It’s important to note that one basis point equates to 0.01%, and generally, yields and prices exhibit an inverse relationship.
Treasury Yields Overview
Investors are particularly looking forward to several significant economic data releases throughout the week. Notably, the New York Fed’s consumer expectations survey is scheduled for Monday at 10 a.m. ET, which will coincide with the University of Michigan’s consumer sentiment report slated for release on Friday.
The most notable data, however, will come from the Consumer Price Index (CPI), expected to be revealed on Wednesday at 7:30 a.m. ET, followed closely by the Producer Price Index (PPI) on Thursday. Market participants will closely analyze these indicators to assess the overall health of the U.S. economy.
Inflation Outlook
“Inflation data is set to dominate our economic calendar this week. We anticipate that the total and core CPI has increased at a more moderated pace in February, following sharp rises in the previous month, with annual increments expected to stabilize,” commented Bill Adams, chief economist at Comerica Bank.
Investor sentiment grew more cautious over the weekend after Donovan indicated that his tariffs could impact U.S. economic growth and did not exclude the possibility of a recession. Furthermore, U.S. Treasury Secretary Scott Bessent echoed similar sentiments on Friday, suggesting the economy may be in the early stages of a slowdown.
“Are we starting to witness the economy we inherited roll back a bit? Absolutely. There will inevitably be a period of adjustment as we transition from public spending to private spending,” Bessent stated during his segment on CNBC’s “Squawk Box.”
He added, “The market and the economy have become increasingly reliant on government spending, and a detox period is to be expected.”
