U.S. Treasury yields edge higher as markets assess Trump’s State of the Union

At 5:07 a.m. ET on Wednesday, the benchmark 10-year U.S. Treasury yield was up 2 basis points at 4.053%. The 30-year Treasury bond yield rose 1 basis point to 4.703%, while the 2-year Treasury note yield added 1 basis point to 3.473%. One basis point equals 0.01%, and yields and prices move in opposite directions.

Market reaction to State of the Union address

Investors focused on President Trump’s State of the Union speech on Tuesday, which lasted nearly two hours, making it the longest on record. The address had a major emphasis on the U.S. economy, with Trump stating that the economy is “roaring like never before” and that inflation was “plummeting.”

During the speech, Trump called for the creation of a government-backed, 401(k)-type pension plan aimed at U.S. workers who do not have access to an employer-sponsored retirement plan. He also outlined plans to ask Congress to approve an executive order he has signed to prevent institutional investors from purchasing single-family homes.

Market participants appeared to be weighing these policy signals alongside the broader economic narrative presented in the address as they adjusted positions in the Treasury market.

Data calendar and geopolitical backdrop

Attention in fixed income markets is now shifting to a series of U.S. economic indicators due later in the week. These include mortgage rate data on Wednesday, weekly initial jobless claims on Thursday, and the producer price index on Friday. The outcomes of these releases may influence expectations around economic conditions and, in turn, Treasury yield movements.

Geopolitical tensions remain another point of focus, with investors monitoring developments between the U.S. and Iran. At the same time, markets appeared to shrug off the latest tariff announcements from Trump, after a new levy took effect on Tuesday at a lower-than-expected rate of 10%.

FAQ

What were the key moves in U.S. Treasury yields on Wednesday morning?
The 10-year Treasury yield rose 2 basis points to 4.053%, the 30-year yield increased 1 basis point to 4.703%, and the 2-year yield gained 1 basis point to 3.473% at 5:07 a.m. ET.

What economic proposals did President Trump highlight in his State of the Union address?
Trump proposed a government-backed 401(k)-type pension plan for U.S. workers without employer retirement plans and described plans to seek congressional approval for an executive order to prevent institutional investors from buying single-family homes.

Which upcoming economic data are investors watching?
Investors are monitoring mortgage rate data on Wednesday, weekly initial jobless claims on Thursday, and the producer price index on Friday.

What geopolitical and trade factors are also in focus for markets?
Markets are watching developments in U.S.-Iran relations and responding to new U.S. tariffs that came into effect at a 10% rate, which was lower than previously expected.