The 10-year Treasury yield slid to its lowest level of the year, reflecting mounting economic uncertainty and shifting rate expectations. Yields dropped over 10 basis points to 4.29%, marking a significant retreat from their January peak of 4.8%. The decline was fueled by weak consumer confidence data, coupled with fears that Trump administration policies on trade and fiscal tightening could slow economic momentum. The Conference Board’s index - a measure of leading indicators of economic strength - fell to its lowest level since June, raising concerns that the post-pandemic era of robust consumer spending may be waning.

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Investors are now fully pricing in two Fed rate cuts for 2025, betting that weakening economic indicators will push policymakers to ease monetary policy. Strong demand for Treasuries in recent auctions highlights a flight to safety, with traders seeking shelter amid stock market volatility and slowing growth signals. If economic conditions deteriorate further, analysts suggest the 10-year yield could test its 200-day moving average of 4.25%, reinforcing fears of a potential downturn.

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