Yields rise as risk-on sentiment builds. Yields climbed as markets turned risk-on ahead of Nvidia’s after-market earnings report today, with relatively low demand in the $70B 5-year auction placing additional upward pressure. Yields closed 1-3 bps higher across the curve, with the 2-year yield at 3.47% and the 10-year yield at 4.05%. Meanwhile, equities rallied on strength in technology names, with the S&P 500 and NASDAQ closing 0.81% and 1.26% higher, respectively. Nvidia Corp. reported a strong earnings outlook, driving the stock over 4% higher in after-hours trading.
Trump to raise global tariff to 15% “where appropriate”. US Trade Representative Jamieson Greer said today that President Trump will sign a directive to raise global tariffs to 15% in some cases, an increase from the 10% levy that went into effect yesterday. Greer also said the White House hopes to maintain continuity with nations who’ve already struck a trade deal with the US. He stated that these countries will not face a higher cumulative tariff rate because of the 15% duty, a welcome sign for the EU and UK especially. The 10% tariff currently in effect was imposed under section 122 of the 1974 Trade Act, which allows President Trump to impose a levy for up to 150 days without Congressional approval. The White House has said they will use that time to conduct trade investigations under other authorities, which will then open the door to permanent tariffs on certain products from specific countries and industries.
Bostic concerned over doubts of Fed independence. Atlanta Fed President Raphael Bostic published a farewell essay today ahead of his retirement at the end of this month, expressing concern about growing public skepticism over the Fed’s independence. Bostic wrote, “My travels over the last several months have made clear that the legal and rhetorical battles raging around the central bank right now have caused people across a wide cross-section to begin to doubt the Fed’s independence. This is a major concern.” His comments come as the Department of Justice investigates Chair Powell and the Fed’s building renovations, which Powell, among others, argues is an attempt to influence monetary policy.