Bond Market Update

Steeper

• Seeing a notable steepening in the curve today, with the 2s10s spread widening to 52 bps from 48 bps yesterday.
• Longer-dated securities are bearing the brunt of the selling activity as the House tries to tackle passing the "One Big, Beautiful Bill" and as the July 9 expiration date for the reciprocal tariff pause looms without clear-cut guidance from the administration as to next steps.
• The president has said he is not inclined to extend the pause and that he may just send letters to countries informing them what their tariff rate will be. Yesterday, President Trump said it was doubtful that a deal with Japan will be reached and that it could face a tariff rate of up to 35% perhaps.
• Moments ago, President Trump said in a Truth Social post that "I just made a trade deal with Vietnam. Details to follow!"
• Stocks are mixed, but mega-cap shares are providing some underlying support for the S&P 500 and Nasdaq Composite.
• The U.S. Dollar Index is up 0.3% to 97.13.
• Yield check:
  • 2-yr: unch at 3.77%
  • 3-yr: +1 bp to 3.75%
  • 5-yr: +2 bps to 3.86%
  • 10-yr: +4 bps to 4.29%
  • 30-yr: +6 bps to 4.84%