Benchmark U.S. 10-year yield falls below 4%, hits lowest level since early April

[Increased interest rates. Bond coupons, yields and positiv changes in basis points.]
Torsten Asmus

U.S. Treasury yields slid on Thursday as investors shunned risky equities and flocked to the safety of bonds. The benchmark 10-year yield (US10Y [https://seekingalpha.com/symbol/US10Y]) fell below the key 4% level for the first time since early September, hitting its lowest level in seven months.

The US10Y was last down 6 basis points to a session low of 3.98%. It was on track to close below the 4% level for the first time since April 6, just a few days after U.S. President Donald Trump upended markets with his sweeping reciprocal tariffs announcement.

A resurgence in trade tensions between the U.S. and China last week has derailed Wall Street's record-breaking run. Traders have snapped up safe-haven assets such as bonds, driving yields lower, and precious metals like gold and silver.

Weakness in the labor market along with pro-monetary policy easing commentary [https://seekingalpha.com/news/4504782-feds-waller-backs-25-bp-rate-cut-at-upcoming-meeting-citing-job-market-weakness] from Federal Reserve policymakers has also contributed to the bond-buying.

"In fixed-income, Treasuries are gaining, led by the short-end, as Fed Governors Waller and Miran have just claimed that imminent rate cuts are needed, although the former speaker prefers a cautious walk down the central bank’s stairs, while the latter wants to jump lower, favoring a half-point reduction," José Torres, senior economist at Interactive Brokers, said.

On Thursday, another catalyst driving market participants to the safety of bonds was a slump in shares of regional banks. The disclosure of bad loans by Zions Bancorporation (ZION [https://seekingalpha.com/symbol/ZION]) and Western Alliance Bancorporation (WAL [https://seekingalpha.com/symbol/WAL]) sent ripples [https://seekingalpha.com/news/4504958-regional-bank-stock-slide-after-two-banks-disclose-bad-loans] through the industry.

Aside from the US10Y, other maturities also slid across the board. The shorter-end, more rate-sensitive 2-year Treasury yield (US2Y [https://seekingalpha.com/symbol/US2Y]) was last down 8 basis points to 3.43%, while the longer-end 30-year yield (US30Y [https://seekingalpha.com/symbol/US30Y]) was down 5 basis points to 4.58%.

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