From Yahoo Finance: 2025-05-30 17:56:00

US Treasuries experienced their first monthly loss this year, dropping over 1.2% in May due to tariff uncertainty and concerns about rising government debt. The 30-year yield rose for the third consecutive month, while two- and 10-year yields increased for the first time this year. The deficit and trade tensions are impacting investor confidence.

Economic data revealed a decrease in US imports in April, along with slower consumer spending growth and low inflation. Money markets predict a 50 basis point cut in Federal Reserve interest rates by December. Signs of economic weakness may benefit shorter-dated maturities, but long bonds face challenges with increased global supply of safe assets.

Citigroup Inc. strategists anticipate a 50 basis point increase in the term premium for 10-year US Treasuries over the next year, as competition for buyers intensifies. The gap between actual and fair value 10-year yields has been shrinking, suggesting a potential decline in demand for dollar assets. Positioning for steeper curves may offer a better risk-off hedge than betting on lower yields.



Read more at Yahoo Finance: US Treasuries Post First Monthly Loss of 2025 on Deficit Woes