Treasury yields cut losses after Trump pledges to unveil tax plan next week

The benchmark US Treasury yield abruptly cut its losses on Friday afternoon, after Donald Trump said in interview that he would deliver a plan for “massive” tax cuts by next week.

Mr Trump told the Associated Press that his plan will provide tax relief for businesses and individuals, saying that it would be “bigger I believe than any tax cut ever”.

The US president added that the package would be revealed on “Wednesday or shortly thereafter”.

Investors have been eager to hear more details on the tax plan ever since the businessman turned politician won in the November election. Analysts have bet that lower taxes could provide a boon to both corporate America and the broader economy.

However, after the failure of the Trump administration to push measures to repeal and replace Obamacare through Congress, doubts have grown about the White House’s ability to conquer tax reform in a timely manner.

In recent trading, the 10-year Treasury yield was little changed 2.23 per cent; it had traded as low as 2.207 per cent ahead of the headlines from the AP wire. Yields move in the opposite direction of prices.

US stocks also cut back on their losses. The Dow Jones Industrial Average, down almost 0.4 per cent at one point, is now trading a few points higher. The S&P 500 trimmed a 0.5 per cent decline to a 0.2 per cent loss. The Nasdaq Composite is trading 0.1 per cent lower after dropping as much as 0.3 per cent