China’s 10-year government bond yield fell to around 1.67% on Monday, its lowest level since July 2025, after the People’s Bank of China left its benchmark lending rates unchanged for a 16th consecutive month at record lows. The one-year loan prime rate (LPR) was held at 3.0%, and the five-year LPR remained at 3.5%.
The move underscores policymakers’ limited room for additional monetary easing, as major global central banks have turned toward tighter policy and the yield spread between 10-year US Treasuries and Chinese government bonds hovers near a record high. Even so, slowing economic growth, muted inflation, and weak credit demand keep the possibility of a rate cut before year-end on the table.
At the same time, investors are closely monitoring high-level US-China contacts after negotiators met on Sunday to lay the groundwork for a closely watched summit between Presidents Donald Trump and Xi Jinping scheduled for September 24.
