U.S. Bond Yields Dip as Trade Tensions Ease and U.S.-China Talks Loom

U.S. Treasury bond yields fell since Wednesday’s market open, driven by improved sentiment around U.S.-China trade tensions and the announcement of upcoming trade talks between the two nations.

There’s a direct link between benchmark bond yields and inflation, making any signals about future inflation impactful on yield movements. The scheduled start of trade negotiations between Washington and Beijing raises hopes for a deal that could lower mutual tariffs, potentially reducing inflation rates.

Yields on 10-year U.S. Treasury notes dropped to 4.290% from the previous day’s close of 4.314%. Yields hit a daily high of 4.338% and a low of 4.281%.

Reports confirm the U.S. and China have agreed to resume trade talks this weekend. U.S. Treasury Secretary Scott Pisent and Trade Representative Gere will head to Switzerland for discussions with China on Saturday and Sunday, led by Chinese Vice Premier He Lifeng.