U.S. Treasury Yields Drop Amid Ongoing U.S.-China Trade Tensions

WASHINGTON, D.C. – U.S. Treasury yields declined slightly on Wednesday as investors kept a close watch on developments in the ongoing trade conflict between the U.S. and China.

As of 5:55 a.m. ET, the yield on the benchmark 10-year note fell less than a basis point to 4.013%, while the yield on the 30-year bond also decreased by less than one basis point to 3.476%. The yield on the 5-year note dipped 1 basis point to 4.610%. It is important to note that one basis point is equal to 0.01% and that bond prices and yields move in opposite directions.

Investor focus is heightened following recent threats from President Donald Trump to impose tariffs on China in response to Beijing’s refusal to purchase U.S. soybeans. In retaliation, China announced new sanctions against South Korean shipbuilder Hanwha Ocean.

The tension escalated when Trump announced he might place an additional 100% tariff on Chinese goods after Beijing enforced strict export controls on rare earth minerals. This back-and-forth has left many financial analysts guessing about future economic indicators.

Adding to the uncertainty, the ongoing U.S. government shutdown has persisted for 15 days, causing a significant data blackout. Consequently, the core Consumer Price Index (CPI) print for September, typically released this week, will not be published.

“If it weren’t for the shutdown, we’d have been writing about today’s CPI print for September, but that’s been delayed, so we’re flying blind on a growing amount of economic data right now,” Deutsche Bank analysts stated in a recent note. They continued, “That said, this CPI print is one of the few things that will come out even if the shutdown continues, as it’s used in the social security calculations, so it’s currently scheduled for October 24.”