The 10-year U.S. Treasury yield ticked higher on Friday after the Supreme Court’s tariff knocked down President Donald Trump’s tariffs and as investors monitored the latest economic data.
The 10-year yield rose less than 1 basis point to 4.083%. The 30-year Treasury bond yield was 2 basis points higher at 4.724%. The 2-year Treasury note yield climbed more than 1 basis point to 3.482%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions. The U.S. Supreme Court struck down many of Trump’s tariffs, which led the president to announce he’s imposing a new 10% “global tariff.” Bond investors are worried loss of the tariff revenue could exacerbate the country’s fiscal deficit issues, hurting demand for U.S. debt.
Roughly half a percentage point of the inflationary rise seen last year was due to tariffs, Torsten Slok, chief economist at Apollo, told CNBC. The Supreme Court’s ruling has made the job of Kevin Warsh, Trump’s pick to succeed Fed Chair Jerome Powell, “a lot easier,” Slok said.
The “key implication is that the inflation forecast is now going to go down, and this makes it a lot easier for the Fed to cut rates,” Slok said.
Economic data
Investors were in the mood to discount the latest economic numbers showing slower growth in the final three months of 2025. Fourth-quarter GDP data came in at 1.4% on an annualized basis, far below the 2.5% increase that economists polled by Dow Jones had estimated.
Excluding the impact of the government shutdown, “you were at 2.5, 2.6. That’s totally fine…in terms of GDP,” said Aditya Bhave, senior U.S. economist Bank of America, on CNBC’s “Squawk Box.”
The latest inflation numbers reported Friday were more difficult for the market to overlook.
The core reading of the personal consumption expenditures price index, the Federal Reserve’s preferred measurement of inflation in the economy, came in at an annual rate of 3% in December, in line with economists’ forecasts but still far above the Fed’s 2% annual goal.
“The concern here is prices,” said Bank of America’s Bhave. “GDP is fine … If anything, now you’re going to get fiscal stimulus hitting the economy very, very imminently, so the folks that are concerned about inflation, I think they’ll stay concerned.”
Others on the Street agreed with that assessment.
“Even though this data is now a few months old, it shows that the Federal Reserve’s inflation problem is far from solved even if it remains on hold when it comes to near-term rate cuts amid the Federal Reserve Chair transition,” said Rick Gardner, investing chief at RGA Investments.
Geopolitically, investors are closely monitoring U.S.-Iran tensions after Trump said on Thursday he would decide whether to take military action against Iran in the next 10 days. A second U.S. aircraft carrier strike group, led by the USS Gerald R. Ford, is sailing to join the USS Abraham Lincoln on station in the Persian Gulf.
CNBC