Amid concerns about the escalation of foreign trade conflicts, the yield on US government bonds is approaching its lowest levels since early December, Interfax-Ukraine reports.
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US Treasuries Yield Dynamics
As of 1:35 p.m., the yield on 10-year US Treasuries was up slightly, by 0.9 basis points, to 4.168%.
The yield on the 30-year note rose 2.7 basis points to 4.479%. At the same time, the yield on the 2-year note fell 1.9 basis points to 3.939%.
Safe Haven Demand: Trade Disputes Fuel Treasury Bond Interest
High demand for safe assets, in particular US government bonds, continues amid the latest news. Recall that the day before, US President Donald Trump announced an increase in duties on imports from China from 10 to 20%. In response, Beijing announced its intention to take action. In addition, 25% duties on imports from Canada and Mexico are expected to come into force on Tuesday.
Forecasts and estimates: potential revenues from duties and economic impacts
Paul Ashworth, senior North America economist at Capital Economics, estimates the potential revenue for the U.S. from new tariffs at nearly $300 billion a year, or about 1% of GDP. However, he cautions that the economic impact is likely to be negative if the money is used to reduce the federal budget deficit rather than boost economic growth.
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