It’s been one of the most chaotic stretches for US markets in recent memory. And the massive surge in long-term Treasury yields has served as yet another example of the bizarre trading action in the aftermath of Trump’s tariff-fueled “Liberation Day.”
The 10-year yield (^TNX) jumped 17 basis points to kick off the week, a massive 34 basis point swing from a low of 3.87% to a high of 4.21%. The yield extended those gains on Tuesday, climbing as much as 10 basis points to hover at around 4.25%.
Similarly, the 30-year yield (^TYX) jumped another 12 basis points Tuesday after seeing its biggest move to the upside since March 2020. As of late afternoon, the 30-year yield traded at 4.72%.
Based on intraday datasets, which date back to 1998, market veteran Jim Bianco said “instances when the 10-year was down at least 12 basis points intraday and closed higher by at least 12 basis points that same day” have only happened three times, including Monday.
“There are too few examples to discern market direction,” he added in a post on X. “Rather, it tells us the bond market thinks today was an extremely important day. How? For now, we can only speculate.”
Strategists have laid out multiple theories. They range from investors seeking more liquidity within a volatile market to bond traders perhaps feeling more confident that the US economy can avoid a recession.
“The bond market’s been telling us it hasn’t been panicking. It’s been telling us that maybe we’re not in a recession yet, and we may not go into one,” Nancy Tengler, chief investment officer at Laffer Tengler Investments, told Yahoo Finance on Tuesday. “Given that as a backdrop, I do think the noise will continue.”
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