Home News Bonds Slump but Short-Term Treasurys Hold Steady as Tariffs Heighten Stagflation Fears

Bonds Slump but Short-Term Treasurys Hold Steady as Tariffs Heighten Stagflation Fears

April 8, 2025

‘We stay underweight long-term Treasurys,’ says BlackRock

by Christine Idzelis
Market Watch

Short-term Treasurys were holding steady Monday, even as the broader bond market slumped as large tariffs appeared to heighten investors’ fears over stagflation.

Exchange-traded funds that hold short-term Treasurys, such as the SPDR Bloomberg 1-3 Month T-Bill and iShares 1-3 Year Treasury Bond ETF, closed Monday about flat, according to FactSet data.

The broader U.S. bond market finished the trading session in the red, with the Vanguard Total Bond Market ETF posting a sharp 1.2% drop, as traders appeared to weigh the risk of tariffs increasing inflation as well as slowing growth under a stagflationary scenario. Longer-term Treasurys were particularly hard hit, with the iShares 20+ Year Treasury Bond ETF slumping 3% on Monday.

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