FX.co ★ Treasury Yields Edge Lower

The yield on the US 10-year Treasury note fell below 4.3% on Wednesday, reaching its lowest point in approximately a week. Despite this, market volatility is anticipated to continue, fueled by escalating trade tensions with China. Prospects for a diplomatic resolution appear bleak, as there are currently no indications of renewed discussions between Washington and Beijing. Recently, President Trump initiated an investigation into the potential need for tariffs on critical minerals, while Nvidia disclosed that the US government has restricted the export of certain AI chips to China without proper licensing. This growing trade uncertainty is undermining investor confidence in US assets, with Treasuries seemingly losing some of their traditional status as a safe-haven investment. Simultaneously, Treasury Secretary Scott Bessent sought to downplay the recent turmoil in the bond market, stating, "We are a long way from needing to intervene," though he also noted, "We have a comprehensive toolkit available should it become necessary."