U.S.-China Trade Deal Impact on Treasury Yields

SOURCE www.nbcnews.com
U.S. Treasury yields rose after U.S. and China agreed to reduce tariffs on each other's goods. The 10-year Treasury yield was up nearly 6 basis points to 4.433%, while the 2-year Treasury yield jumped 10 basis points to 3.996%.

Key Points

  • U.S. and China agreed to lower tariffs on each other's goods
  • 10-year Treasury yield rose by nearly 6 basis points
  • 2-year Treasury yield increased by 10 basis points
  • Tariffs between both countries to be reduced from 125% to 10%
  • Some tariffs, like the 20% duties on Chinese imports linked to fentanyl, still in place

Pros

  • Reduction in tariffs is positive for both U.S. and China
  • Investors welcomed the news by pushing up Treasury yields

Cons

  • Some tariffs still remain, such as the 20% duties on Chinese imports related to fentanyl