Ten-Year Yield Jumps To One-Month Closing High After U.S.-China Trade Deal

(RTTNews) - After ending last Friday's trading roughly flat, treasuries showed a substantial move to the downside during trading on Monday.

Bond prices moved sharply lower early in the session and remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged 8.2 basis points to 4.457 percent.

With the sharp increase on the day, the ten-year yield shot up to its highest closing level in a month.

The steep drop by treasuries came after the U.S. and China reached a trade deal that drastically reduces the massive tariffs on each other's goods, reducing bonds' safe haven appeal.

The White House said the agreement calls for the U.S. and China to each lower tariffs by 115 percent while retaining an additional 10 percent tariff.

The U.S. will retain tariffs imposed in response to the fentanyl national emergency, resulting in an effective tariff rate on Chinese goods of 30 percent.

In previous tit-for-tat moves, tariffs on U.S. and Chinese goods had spiked as high as 125 percent and 145 percent, respectively, which Treasury Secretary Scott Bessent had described as the "equivalent of an embargo."

The White House said the 34 percent reciprocal tariffs on U.S. and Chinese goods will be suspended for 90 days beginning Wednesday, May 14th.

Both nations also agreed to establish a mechanism to continue important discussions about trade and economics, the White House said.

President Donald Trump told reporters "maybe the most important thing" to come out of the trade talks was that China has "agreed to open up."

Trading on Tuesday may be impacted by reaction to the Labor Department's report on consumer price inflation in the month of April.