10.10.202515:41:17UTC+00Treasury Yields Drop Further After Trump’s Threats on China

The yield on the US 10-year Treasury note declined further to 4.06% on Friday, reaching its lowest point in nearly three weeks. This decline has effectively erased the earlier gains witnessed this week, driven by escalating concerns of a renewed trade conflict between the US and China. President Trump has threatened to implement a "massive increase in tariffs" on Chinese imports in retaliation to Beijing's plans to impose tighter export controls on rare earth elements. Additionally, he suggested the possibility of canceling his forthcoming meeting with President Xi Jinping, thereby intensifying geopolitical tensions. These statements followed a series of actions by China earlier in the week, such as new fees on US vessels docking at Chinese ports and an antitrust probe into Qualcomm. Concurrently, the federal government shutdown has entered its tenth day, causing delays in the release of key economic data, and likely affecting the publication of next week’s scheduled reports, including the Consumer Price Index (CPI). Investors continue to anticipate a 25-basis-point interest rate cut by the Federal Reserve later this month, with the likelihood of another adjustment in December remaining at approximately 83%.