U.S. Treasury yields dropped on Thursday as traders kept a close eye on trade tensions between the U.S. and China. They also reacted to updates from former President Donald Trump, who seems to be softening his stance on some key economic issues.
The 10-year Treasury yield slipped by over 4 basis points to 4.344%. Meanwhile, the 2-year yield fell 3 basis points to 3.826%. (One basis point is 0.01% Yields go down when bond prices go up.)
What’s Happening with U.S.-China Trade Talks?
Investors got a bit of relief when Trump hinted at easing tensions with China. At the moment, U.S. tariffs on Chinese goods are very high—up to 145%. But Treasury Secretary Scott Bessent shared some hope, saying there could be a “big deal” between the two nations.
However, China pushed back. On Thursday, the Chinese Ministry of Commerce made it clear there won’t be talks unless the U.S. cancels its “unilateral” actions. The ministry’s spokesperson, He Yadong, said the U.S. should first remove all the extra tariffs.
What Did Trump Say About the Federal Reserve?
Another reason investors calmed down: Trump said he does not plan to fire Federal Reserve Chairman Jerome Powell. This came after a week of criticism, where Trump called Powell a “major loser” and urged the Fed to cut interest rates.
His latest statement helped reassure the markets. Removing Powell could have caused more uncertainty in the financial world.
What’s Coming Up for Investors?
Markets are also waiting for new economic data to understand where the U.S. economy is headed. Reports on durable goods and existing home sales are expected Thursday. On Friday, the Michigan consumer sentiment index will be released, giving more clues about how people are feeling about the economy.
News originally published by CNBC
