TREASURIES-US yields rise on tariff concerns as market awaits auctions

By Karen Brettell

July 8 (Reuters) - U.S. Treasury yields rose on Tuesday, a day after President Donald Trump announced tariffs on multiple countries and as investors awaited Treasury's sales of $119 billion in coupon-bearing debt this week.

Trump told 14 nations, from powerhouse suppliers such as Japan and South Korea to minor trade players, that they will face sharply higher tariffs from a new deadline of August 1.

Investors are concerned that higher tariffs will increase inflation and slow economic growth, though so far price pressures have remained relatively contained.

The U.S. Congress also last week passed the Trump-backed "Big Beautiful Bill," which will add trillions of debt over the coming decade and raises the debt ceiling by $5 trillion.

"There's plenty of concern about what the one 'Big Beautiful Bill' means and if tariffs are going to produce inflation that we really haven't seen yet," said Zachary Griffiths, head of IG and macro strategy at CreditSights in Charlotte, North Carolina. "A lot is going to hinge on this CPI print."

The U.S. Labor Department is due to release the Consumer Price Index for June on July 15.

Longer-dated debt yields increased at a faster pace than shorter-dated ones on Tuesday before auctions of 10-year and 30-year debt this week.

The Treasury will sell $58 billion in three-year notes on Tuesday, $39 billion in 10-year notes on Wednesday and $22 billion in 30-year bonds on Thursday.

"To the extent we've seen the curve steepen over the past couple of days, maybe that adds to the likelihood of a decent bid for tens and thirties," Griffiths said.

Demand for longer-dated debt may also be supported after Treasury Secretary Scott Bessent last week said he does not plan to increase the auction sizes of the debt at current interest rates.

The yield on benchmark U.S. 10-year notes US10YT=RR was last up 3.6 basis points on the day at 4.431%, the highest level since June 20.

The 30-year bond US30YT=RR yield rose 3.8 basis points to 4.968% and reached 4.974%, the highest level since June 9.

The interest rate sensitive 2-year note US2YT=RR yield rose 1 basis point to 3.913% and got as high as 3.918%, the highest level since June 23.

The yield curve between two-year and 10-year notes steepened by around three basis points to 51 basis points.

A global bond selloff including Japanese and German bonds also helped to pull U.S. yields higher on Tuesday.

Yields have also increased this week after a stronger-than-expected jobs report for June on Thursday led traders to pare bets on how many times the Federal Reserve is likely to cut rates this year.