The US economy triggers a "slowdown alarm" as Treasury yields collectively plunge.

The yield on US Treasuries fell to a multi-month low on Monday, following a mixed manufacturing survey that raised concerns among investors about slowing economic growth, coupled with a drop in oil prices. US President Trump stated that there is no room for agreement before the tariffs on Canada and Mexico take effect on Tuesday. After Trump's comments, the stock market plummeted. The yield on the two-year US Treasury note dropped by about 5 basis points, and the yield on the five-year US Treasury note also decreased, stabilizing below 4%. As concerns about economic growth intensified, shorter-term bond yields fell below 4% for the first time since October of last year. The February ISM manufacturing index dropped from 50.9 (expansion) to 50.3 (still in expansion territory). The data showed unexpected contractions in new orders and employment indices, while the Producer Price Index (PPI) for factory payments rose higher than expected. The further decline in US Treasury yields followed the fall in US benchmark crude oil prices. Earlier reports suggested that the US is preparing to increase production. Jack McIntyre, portfolio manager at Brandywine Global Investment Management, said, "The data is starting to show some weakness, and you're seeing a shift in risk assets that's playing into Treasuries." "We've seen European bond yields tick higher after we entered the market, which might be a bad day for US Treasuries, but risk assets are teetering, and long-dated Treasuries are being bought." The US bond market recorded its biggest increase in six months in February, while the US stock market saw declines. Weaker consumer confidence and spending indicators have led people to bet on a rate cut by the Federal Reserve later this year. These indicators have led economists to lower their expectations for US first-quarter economic growth. The Atlanta Fed's GDPNow forecast for first-quarter GDP growth in the US has been markedly lowered by 510 basis points, from an expected growth of 2.33% to a contraction of 2.825%. Amid Trump's tariff agenda and federal government job cuts, economic concerns have escalated. The task of Federal Reserve policymakers is to promote full employment in the US economy and maintain price stability. However, the inflation rate continues to exceed the central bank's long-term target of 2%. St. Louis Fed President Mester said Monday that rates should stay at a restrictive level until progress towards the target is restored. The 10-year US Treasury yield fell by 5 basis points, dropping below a low of 4.16% since December of last year, while remaining close to that level. In terms of US bond options, demand for hedging against further declines in yields continues. For example, an investor has spent $27 million betting that the 10-year Treasury yield will fall to at least 4.1% by the end of April. With most European bond markets experiencing larger increases in yields, the US market opened higher, attributed to prospects of increased bond supply to fund more defense spending. Whether bond yields will continue to decline may depend on the labor market data for February that will be released later this week. James Athey, portfolio manager at Marlborough Investment Management, said, "We need more data to determine whether this is just a soft patch or something worse." "It's hard to say Treasuries are cheap unless you're confident in soft data."