FX.co ★ Treasury Yields March Higher

The yield on the U.S. 10-year Treasury note inched closer to 4% on Friday, having earlier dipped to 3.93%. This rebound in yields was driven by positive results from regional banks, offering some comfort to investors after an initial retreat to safety prompted by revived worries over credit stress within the U.S. banking sector. That anxiety had previously caused a sell-off in equities and heightened demand for Treasuries. Simultaneously, tensions concerning U.S.-China trade relations seemed to subside when President Trump remarked that the existing tariffs on Chinese imports were "not sustainable" and announced scheduled talks with President Xi Jinping in South Korea in the near future. On the economic data front, significant reports remain delayed due to the ongoing federal government shutdown, which is now poised to enter its fourth week. In terms of monetary policy, markets have fully anticipated a 25-basis-point reduction in the federal funds rate at the forthcoming meeting later this month.