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President Trump's tariffs are sending markets on a roller coaster ride with long-term Treasury yields also displaying peculiar trading, some might say. Here with more, Yahoo Finance's Alexandra Canal. This is something that actually, Mark just alluded to when we talked about earlier. Treasuries had gone, come, yields had come down a lot, but over the past couple of days, we've seen an increase in yields.

Increase in yields, and this really started at the start of the week. The 10-year Treasury yield jumped 17 basis points on Monday. This was this massive 34 basis point swing. We extended those gains today. We're up about 10 basis points just today, hovering at around 4.25%. Same thing with the 30-year yield, jumping another 12 basis points. We're currently at levels there at around 4.72%. Now, as a reminder, bond prices and yields, they're inversely correlated. And so we're seeing this heavy selling in the bond market. And what's really interesting is if you talk to a lot of strategists out there, they don't exactly know why. And Wall Street has laid out a few different scenarios. One could be this rush for liquidity, perhaps there's some selling to have some cash on the sideline. Another theory is perhaps bond traders are pricing in higher inflation due to these tariffs. We just heard from the White House, they are going to be implementing 104% tariffs on China at midnight. And if inflation's going to be high over the long term, the Fed is going to maintain a very restrictive interest rate environment, and therefore, push up yields. But what's made this a little bit more complicated is the stagflation risks of it all. And I just talked about the flation part of stagflation, but if you focus in on the stag part, slowing growth, that implies that we could potentially have a US recession. And we've seen several Wall Street firms come out and talk about the possibility of a recession increasing due to these tariffs. So, uh, that's initially, Julie, what you said. That's what we saw in the aftermath of Liberation Day. Perhaps we're entering a period of stagflation that could lead to a recession, and yields will come down. Um, but now we're just seeing this uptick and this rise, and there's not a true catalyst as to why.

Well, you know what? We have somebody on set who, would love to get your opinion, Mark. And that's Mark Newton who's still with us on set from Fundstrat. Mark, you've been hearing what Ally is talking about. I know you've been watching the bond market as well very closely. What's going on these past couple of days?

We have seen a slowdown and a pretty dramatic reversal in Treasuries in recent days. Uh, my take is that it's going to prove short-lived. I don't see any real catalyst for why yields are going to escalate that dramatically. So, you know, you could potentially move up for another couple weeks. The rise in interest rates, honestly, is also directly coinciding with a big pullback in the precious metals, and that's something that people should take a look at also. That's going to create some opportunity. My cycles show yields steadily falling between now and really the fall. So I think 10 years is going to get down to 3.5%. It doesn't have to be because of, uh, you know, necessarily growth falling apart. It could be because inflation is really starting to come down much more quickly than people anticipate, and you've seen that steepening on the yield curve. Uh, the two years is really coming down dramatically, and I think that's also interesting. Um, so, you know, tough. I'm not a big bear on Treasuries here, but I do think at this point they've already outperformed equities so much. It's right to actually favor US equities and get out of that 60/40 and more into equities if you have a time frame of say, two or three months. I think we're going to see the road, it'll be a little choppier now for Treasuries after such a big decline in yields over the last six months.

Hey Mark, I want to ask you a question, too, because we spoke with Steve Sosnick, friend of the show. He's from Interactive Brokers. He laid out another interesting theory that perhaps with all the back and forth with China, there's a possibility that China will stop buying our debt, that they will boycott our debt, and how that could potentially impact the demand because then the US Treasury is going to have to raise the yields to sort of make up for that loss. Is that a risk at all?

I think it's certainly a risk. I don't know that can be, uh, immediately said is something that's going to happen right away. Those kind of things happen gradually over time, but you know, we've heard stories of that kind of thing happening. I think China is an interesting story. I mean, we've seen such a big rally off the lows. China is extraordinarily volatile. We know they have material problems with regards to M1 falling, the lack of demand, the tariff. Even the perception of tariffs is really going to spook China, I think, for the months to come. That's one of my reasons why I think crude oil drops so sharply. Uh, China is very important to the global demand picture. So, uh, that's something that needs to be worked out right away.

All right. Mark, Ally, thanks so much.

Thank you.

Thank you.