The yield on the US 10-year Treasury note fell to around 4.04% in post-holiday trade on Tuesday, declining for a second session as trade-related uncertainty and expectations of Federal Reserve rate cuts supported demand for government debt. On Friday, yields dropped sharply after President Donald Trump threatened major tariff hikes on China in response to Beijing’s new export controls on rare earth minerals, before later easing his tone and assuring that trade relations “will all be fine.” Both nations have since signaled willingness to resume talks ahead of a possible Trump-Xi meeting in South Korea later this month. Meanwhile, the prolonged US government shutdown has limited the release of key economic data, leaving investors to look toward upcoming bank earnings for signals on economic momentum. Markets continue to price in a quarter-point Fed rate cut this month and another reduction in December.
