Treasury yields declined on Thursday after U.S. President Donald Trump indicated that high tariffs on China may be coming down, and backtracked plans to fire the Federal Reserve chief.
At 5:30 a.m. ET, the 10-year Treasury yield was down over 3 basis points at 4.349%, while the 2-year Treasury yield was down nearly 3 basis points at 3.832%.
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%.
On Wednesday, it was reported that the Trump administration was considering lowering the tariffs to between 50% and 65%, which would still be extremely high, in comparison to other countries.
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.
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, investors will await durable good orders and existing home sales on Thursday as well as the Michigan consumer sentiment on Friday for further insights into the health of the U.S. economy.
