U.S. Treasury prices rise as 10-year yield falls 4 basis points to a one-week low of 4.39%

U.S. Treasury prices rise as 10-year yield falls 4 basis points to a one-week low of 4.39%

U.S. Treasury prices experienced a significant rise on Thursday, May 16, 2025, as the 10-year yield fell by 4 basis points to a one-week low of 4.39%. This decline in yield, which moves inversely with bond prices, was driven by a combination of factors including positive trade developments and softer-than-expected inflation data.

The yield on the 10-year Treasury note, which was previously climbing for five consecutive days, dropped by 4 basis points to 4.39%, according to FactSet data. This downward movement was accompanied by a 0.5% increase in the iShares 20+ Year Treasury Bond ETF, which traded at $85.81 [1]. Similarly, the yield on the 2-year Treasury note decreased by 7 basis points to 3.988%, while the 30-year Treasury bond yield fell by 3 basis points to 4.936% [1].

Investors' optimism was buoyed by the recent trade agreement between the U.S. and China, which temporarily paused most tariffs for 90 days. This development eased fears about a global trade war and the potential risks to the U.S. economy [2]. Additionally, the inflation reading for April came in softer than expected, which helped to alleviate some recession fears.

However, concerns remain as some companies, such as Walmart, have warned about rising costs due to tariffs, which may necessitate price increases in the near future [2]. Federal Reserve Chairman Jerome Powell also cautioned about potential supply shocks and the implications for long-term interest rates [2].

Looking ahead, investors will be closely monitoring housing starts data and the University of Michigan's consumer sentiment survey, which are scheduled for release on Friday [2].

References:
[1] https://www.marketwatch.com/livecoverage/stock-market-today-dow-to-dip-on-united-health-plunge-s-p-and-nasdaq-lower-ahead-of-data-dump
[2] https://www.cnbc.com/2025/05/16/us-treasury-yields-investors-weigh-the-state-of-the-us-economy.html