Business

Yields drop amid the looming threat of the trade war

Investors seek safety as Treasurys rise

The threat that Donald Trump made to the Chinese in which he imposed 25% more tariffs on their products is coming around and causing repercussions to the American markets and economy in spite of the revenue from the taxation.

Another direct effect of the threat is the fact that the debt prices were considerably higher in the early hours of Tuesday, investors have expressed their concern over the move from the government.

As is common, the yield is calculated by considering the Treasurys for 3 months, 1 year, 2 years, 3 years, 5 years, 10 years, and 30 years.

Yield, as a rule, must move inversely with price. At the 10 year Treasury note the yield was lower at approximately 2.46% while it was 2.87% on the 30 year Treasury bond. The traders from both countries are following the ebbs and flows in the trade relations between the U.S. and China.

The latest development is that the Trade Representative of the U.S. has publicly announced that the increased tariffs on Chinese imports will be implemented on Friday, this is the first formal announcement since the announcement from the President on Sunday.

The specifics of the tariff did not vary from the tweet, there would be an increase in tariffs on $200 billion worth of goods from 10% to 25%. There has been no comment on the additional $325 billion worth of goods that were also supposed to be levied at the same rate.

As the Chinese Vice Premier is expected to attend a trade summit along with a delegation of Chinese economists, investors and traders hold their breath as they await word on the prospects of a possible trade war in the future.

About the author

Joseph Ellis

Joseph Ellis

Joseph is the youngest team member of Bulletinland, and he has been writing for various online publications as writing is in his blood. He loves to share quick updates from Technology and Business arena. Sometimes, he shares interesting General News bulletins as well.

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