Treasuries Move Notably Lower Amid Worries About Repaying Tariffs

(RTTNews) - With trading resuming following the long Labor Day weekend, treasuries showed a notable move to the downside during trading on Tuesday.

Bond prices regained some ground after an early slump but remained firmly negative. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 5.0 basis points to 4.277 percent.

The thirty-year yield also shot up 5.4 basis points to 4.971 percent after reaching an intraday high just shy of 5.0 percent.

The weakness among treasuries came after the U.S. Court of Appeals for the Federal Circuit ruled most of President Donald Trump's global tariffs are illegal.

In a 7-4 decision, the appeals court ruled that the power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution.

However, the court delayed implementation of its order until October, giving the Trump administration time to appeal the decision to the Supreme Court.

"All tariffs are still in effect!" Trump said in a post on Truth Social. "If these tariffs ever went away, it would a total disaster for our country."

Treasuries came under pressure early in the session amid concerns the government may have to repay the billions of dollars already brought in through Trump's tariffs.

In U.S. economic news, the Institute for Supply Management released a report showing a slight increase by its reading on U.S. manufacturing activity in the month of August, although the index still indicated the sixth consecutive month of contraction.

While the ISM said its manufacturing PMI inched up to 48.7 in August after falling to a nine-month low of 48.0 in July, a reading below 50 still indicates contraction. The uptick matched economist estimates.

Reports on factory orders and job openings may attract some attention on Wednesday along with the Federal Reserve's Beige Book.