Treasury yields slip as traders navigate U.S.-China trade tensions

Treasury yields declined on Thursday as investors continue to weigh the latest development on the global trade front, as well as President Donald Trump backtracking on plans to fire the Federal Reserve chief.

The 10-year Treasury yield was down 8 basis points at 4.307%, while the 2-year Treasury yield was down 7 basis points at 3.789%.

One basis point equals 0.01% and yields and prices move in opposite directions.

Investor concerns eased on Thursday after Trump indicated a softening of trade tensions between the U.S. and China. U.S. tariffs on China currently stand at 145%. Additionally, Treasury Secretary Scott Bessent said “there is an opportunity for a big deal here” on trade between the U.S. and China.

However, China said on Thursday that there will be no conversations with the U.S. on tariffs. “If the U.S. really wants to resolve the problem ... it should cancel all the unilateral measures on China,” Ministry of Commerce Spokesperson He Yadong said to reporters.

On the other hand, investors received some good news when Treasury Secretary Scott Bessent said on Thursday afternoon that the Trump administration may reach “an agreement on understanding” on trade with South Korea “as soon as next week.”

“We had a very successful bilateral meeting with the Republic of South Korea today. We may be moving faster than I thought, and we will be talking technical terms as early as next week,” Bessent said.

Additionally, investors were relieved after Trump said on Tuesday that he has “no intention” of firing Federal Reserve Chairman Jerome Powell. Trump has been taking shots at Powell in recent weeks and urged the central bank leader to lower rates, even calling him a “major loser” on Monday.

On the data front, orders for durable goods jumped 9.2% in March, eclipsing economists’ expectations of a 1.6% rise. There was no reaction among U.S. Treasuries, suggesting investors’ belief that this is not a sign of a renewed economy.

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