Trump's decision to temporarily halt tariffs did not lead to a significant decrease in bond yields. Despite the announcement of a pause on reciprocal tariffs, the 10-year Treasury yield increased by 13 basis points. This rise in yields contradicts the administration's goal of reducing borrowing costs for Americans.

Even though Trump suspended the trade war for 90 days, bond yields did not align with the administration's desired direction. On the day of the announcement, yields surged and remained high despite the halt on most reciprocal tariffs, maintaining the baseline rate at 10%. The 10-year Treasury yield hovered at around 4.4%, near its earlier peak of 4.45%.

This increase in yields goes against Trump's aim of lowering borrowing costs by implementing measures to enhance government efficiency and reduce spending. The conflicting reality of heightened bond yields indicates a divergence from the administration's intended outcome amid the escalation of the trade war.

Amid concerns of a potential recession and a continuous decline in stock prices, investors turned away from US Treasurys, opting to sell them off as new tariffs were imposed on China. Despite the administration's decision to pause tariffs for other countries and set a universal 10% duty rate, bond yields remained on an upward trajectory, reaching levels not seen since the early days of Trump's presidency.

The ongoing sell-off in bonds reflects a shift in investor behavior, as traditional safe-haven assets like US Treasury bonds are being questioned amidst geopolitical uncertainty. Market analysts suggest that doubts over the reliability of US government debt as a secure investment, coupled with broader economic and financial uncertainties, may be contributing factors to the current bond market fluctuations.