The yield on the US 10-year Treasury note held around 4.02% on Thursday, hovering near its lowest levels since April amid pressure from escalating US-China trade tensions, the ongoing US government shutdown and bets on further Federal Reserve interest rate cuts. President Donald Trump confirmed that the US is currently engaged in a sustained trade war with China, though Treasury Secretary Bessent hinted the trade truce could be extended beyond three months if Beijing halts plans for new export controls on rare earth minerals. Meanwhile, the government shutdown entered its third week, delaying key economic data releases that could guide monetary policy. Fed Chair Powell recently pointed to signs of a cooling labor market, reinforcing bets on a rate cut this month, another in December, and potentially three more next year.
