U.S. Treasury yields rose on Thursday as investors awaited the first trade deal on tariffs and digested the Federal Reserve’s latest interest rate decision.
At 4:20 a.m. ET, the 10-year Treasury yield was more than 2 basis points higher at 4.302%. The 2-year Treasury yield was up just over 2 basis points at 3.815%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
Investors are anticipating a trade deal announcement between the U.S. and the U.K. on Thursday, making Britain the first country to finalize a tariff agreement. U.S. tariffs on the U.K. currently stand at a baseline level of 10%.
“We will continue to take a calm and steady approach to talks and aim to find a resolution to help ease the pressure on UK businesses and consumers,” said a government spokesperson from the U.K.’s Department for Business and Trade.
“Given that full trade deals take years to negotiate, this will likely be a framework and it will be interesting to see whether the 10% baseline tariff stays as that will provide an important template for negotiations with other countries and a good guide to the long-term tariff strategy of the US,” Deutsche Bank analysts said in a note.
Investors are also digesting the Federal Reserve’s interest rate decision on Wednesday, with the central bank holding the benchmark overnight borrowing rate in a range of 4.25% to 4.5%, where it has been since December. It was a widely expected move.
Fed Chairman Jerome Powell noted in a post-meeting news conference that President Donald Trump’s tariffs will delay the central bank’s timeline for achieving its goals.
“What looks likely — given the scope and scale of the tariffs — is that we will see certainly the risks to higher inflation, higher unemployment have increased. And if that’s what we do see — if the tariffs are ultimately put in place at those levels, which we don’t know — then we won’t see further progress toward our goals,” he said. “We might see a delay in that.”
Investors will also await further economic data, including weekly jobless claims at 8:30 a.m. ET and the New York Fed Survey of Consumer Expectations later in the day.
