Market Turmoil: Treasury Sell-Off Amid U.S. Tariff Uncertainty

The U.S. Treasury market experienced significant volatility, transitioning from buying to extensive selling as investors reacted to impending U.S. tariffs. This led to fluctuating yields and changing expectations for a potential rate cut. Analysts highlighted investor behavior and market implications while anticipating economic effects from the tariffs.

The U.S. Treasury market underwent a chaotic session, marked by intense selling on Monday as investors prepared for potential impacts of U.S. tariffs taking effect Wednesday.

In a dramatic move, benchmark 10-year yields fluctuated by 35 basis points as rate cut prospects diminished from a half to one-third chance. The bond-market volatility reached an 18-month peak.

Experts noted a lack of clarity and strategic liquidations of treasuries, anticipating critical outcomes from the tariff introduction. Analysts underscored shifts in investor strategies, revealing a broader economic uncertainty looming over the market.

(With inputs from agencies.)