U.S. Treasury Yields Rise Amid Inflation Concerns from Tariff War

U.S. bond yields rose slightly amid concerns over inflation linked to a trade war with China, as the yield on the 10-year Treasury climbed to 4.576%. Short-dated Treasury yields also increased due to expectations that tariffs imposed by President Trump could elevate consumer prices, although longer-term yields faced downward pressure from fears of economic stagnation. The potential for higher import prices is raising inflation concerns and has led analysts to predict a flatter yield curve, reflecting the tensions in the market. Meanwhile, the Federal Reserve remains cautious, having paused its monetary policy easing, with expectations it may hold rates steady until later this year. The situation is complicated further by China's retaliatory tariffs on U.S. goods, heightening worries of prolonged economic strain between the two largest economies. Analysts are suggesting that risks of stagflation may be increasing, leading to uncertainty in investment decisions.