In just two months, the financial markets have already chalked up moves worthy of a full year: sector-specific washouts on the equity side, a sharp precious-metals spike corrected in record timing, and a clear rebound in oil as geopolitical tensions flared once more.

However, on the bond market, moves have been more limited. Above all, US 10-year rates are currently near their lowest levels of the year, at just above 4%. And that is even though several factors-in the past week alone-could have acted as catalysts and pushed long-term yields higher.

Nothing seems to work

First came the Fed minutes, published last Wednesday. The account of the January meeting revealed divisions over the future path of rates. And there appear to be more Fed members in favor of a cautious approach than members quicker to cut rates.

On Friday, the PCE inflation reading slightly surprised to the upside, at +3% y-o-y. This is the fastest pace since February 2025. However, investors focused mainly on growth concerns, as Q4 GDP, released at the same time, grew at half the expected pace (+1.4% at an annual rate). A slowdown explained by the 43-day shutdown last autumn.

Over Q4 2025, consumer spending rose by just 2.4%, versus 3.5% in the previous quarter.

Finally, there was the Supreme Court's decision to strike down the tariffs on Friday afternoon. Those tariffs had become a meaningful source of funding for the US Treasury, and therefore a way to reduce the deficit. However, the bond market expects tariffs to return, one way or another.

Donald Trump immediately reacted by announcing a 10% global tariff, which he then raised to 15%. "We will get back to the same level of tariffs for the countries concerned. It will simply be less direct and a bit more complex,” Treasury Secretary Scott Bessent said. "I have the feeling Americans won't feel it.”

Still the ultimate safe haven

The other key factor is that the US 10-year continues to play a safe-haven role. While US indices have gone nowhere for a few weeks now, beneath the surface the corrections have been significant. Fears of AI-driven disruption are spreading across many sectors, as new models are rolled out by Anthropic and its peers.

What sector performance since the start of the year shows is that investors are looking for shelter in more traditional parts of the economy: utilities, energy and consumer staples. That search for safety likely extends beyond equities, which could also help explain why long-term yields are not rising.

More broadly, moves in Treasuries are a far cry from the fears that surfaced a year ago around the sell America trade-the idea that investors would pull out of the United States en masse in the face of the new US administration's unpredictability.

In January, the issue returned to the fore when Donald Trump threatened to annex Greenland. A Deutsche Bank strategist then suggested Europeans could use the $8 trillion in Treasuries as a means of retaliation.

While there has been no major sell-off in US assets, investors, in a risk-management mindset, are increasingly looking to diversify away from the United States. This is therefore more a flow issue than a stock issue.

In early February, Amundi, Europe's largest asset manager, said it intended to reduce its exposure to the United States over the coming years. A similar announcement to Pimco's in January, which expects Donald Trump's "unpredictable” policies to translate into "several years of diversification away from US assets”.