Treasuries Slide Firmly Into Negative Territory As White House Confirms Tariffs To Take Effect

(RTTNews) - After showing a lack of direction early in the session, treasuries came under pressure over the course of the trading day on Friday.

Bond prices spent much of the day lingering near the unchanged line before coming under pressure in afternoon trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.7 basis points to 4.569 percent.

The increase on the day came after the ten-year yield ended the previous session at its lowest closing level in well over a month.

Treasuries saw further downside going into the close after White House press secretary Karoline Leavitt confirmed tariffs will be levied against major U.S. trading partners beginning Saturday.

Leavitt said the Trump administration will be implementing 25 percent tariffs on Mexico and Canada as well as a 10 percent tariff on China.

The White House press secretary said the tariffs were being imposed in response to the illegal fentanyl the countries have "sourced and allowed to distribute into our country, which has killed tens of millions of Americans."

Earlier in the day, traders seemed reluctant to make significant moves as they digested the Commerce Department's closely watched report on consumer price inflation.

While the report showed consumer prices increased in line with economist estimates in the month of December, the data also suggests inflation remains somewhat sticky and is likely to keep the Federal Reserve on hold in the coming months.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.3 percent in December after inching up by 0.1 percent in November. The increase matched expectations.

The annual rate of growth by the PCE price index accelerated to 2.6 percent in December from 2.4 percent in November, which was also in line with estimates.

Excluding food and energy prices, the core PCE price index crept up by 0.2 percent in December following a 0.1 percent uptick in November. The core price growth also matched expectations.

The annual rate of growth by the core PCE price index came in at 2.8 percent in December, unchanged from the two previous months and in line with estimates.

The Labor Department's monthly jobs report is likely to be in the spotlight next week, while reports on job openings and manufacturing and service sector activity may also attract attention.