10-year Treasury yield falls as investors assess U.S. economy, trade developments

The 10-year Treasury yield moved lower on Friday as investors weighed the slate of trade developments and economic data in the past week.

The yield on the benchmark 10-year Treasury was more than 2 basis points lower at 4.386%. The 2-year yield was less than 1 basis point lower at 3.917%, while the 30-year yield fell more than 2 basis points to 4.924%.

One basis point is equal to one one-hundredth of a percent. Yields and prices move inversely to one another.

After announcing a trade framework with Japan, U.S. President Donald Trump is now turning his attention to negotiations with the European Union. Trump is planning to meet with European Commission President Ursula von der Leyen over the weekend on trade matters.

Optimism that a trade deal between the two sides rose when Washington signed a “massive Deal” with Japan, and Trump subsequently told dinner guests on Tuesday that “we have Europe coming in tomorrow, and the next day.”

However, while upcoming trade deals may slightly lower the newly announced reciprocal tariffs, companies are likely to pass those costs on to consumers, and consequently weigh on a “key source of U.S. growth,” Eastspring Investments wrote in a note.

“A slowdown in U.S. consumption would negatively impact global exporters, and hence, weigh on overall global growth,” the investment firm's analysts said, adding that they expect U.S. gross domestic product growth to slow to around 1.6% year over year by the end of 2025.

U.S. Treasurys also “struggled” thanks to a strong batch of recent data from the U.S., Deutsche Bank economists wrote in a daily note, citing weekly initial jobless claims that fell for a sixth consecutive week, as well as better-than-expected flash purchasing managers' index numbers, with the composite reading for the U.S. up to a seven-month high of 54.6, above the 52.8 expected.

During a remarkable visit Thursday afternoon to the Fed's massive renovation project, the president again pushed for lower rates.

“We'd be like a rocket ship. As good as we're doing, we do better if we had lower interest rates,” Trump told reporters outside the central bank building. “And we should. We're prime. Don't forget, without us, the whole world collapses. So we should have the lowest interest rate.”