Treasury yields dropped significantly on Wednesday, with 10- and 30-year rates hitting their lowest levels of 2025, driven by heightened Middle East tensions following President Trump’s comments about taking ownership of Gaza.
The flight-to-safety trade pushed the 10-year yield down 6.2 basis points to 4.449% and the 30-year yield down 7.5 basis points to 4.672%, marking their lowest points since December.
This bond market movement occurred against a backdrop of mixed economic signals, including stronger-than-expected ADP employment data showing 183,000 new jobs in January and a concerning jump in the U.S. trade deficit to $98.4 billion in December, its second-highest level ever.
Adding to the market context, Richmond Fed President Tom Barkin’s comments suggested rate hikes would only come with economic overheating, while the Treasury Department announced plans to maintain current auction sizes, providing some stability amid the geopolitical uncertainty.