Treasury yields flat as investors parse China-U.S. trade deal, await inflation print

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A trader works on the floor at the New York Stock Exchange on May 12, 2025.

Brendan McDermid | Reuters

Treasury yields traded relatively flat as investors continue to parse the recent China-U.S. trade deal and await key U.S. inflation data.

At 3:57 a.m. ET, the 10-year Treasury yield was up under a basis point to 4.457%, while the 2-year Treasury yield fell over a basis point to 3.983%.

One basis point is equivalent to 0.01%, and yields and prices have an inverse relationship.

Symbol	Company	Yield	Change
US10Y	U.S. 10 Year Treasury	4.449%	-0.008
US1M	U.S. 1 Month Treasury	4.356%	+0.043
US1Y	U.S. 1 Year Treasury	4.141%	+0.008
US2Y	U.S. 2 Year Treasury	3.981%	-0.021
US30Y	U.S. 30 Year Treasury	4.894%	+0.007
US3M	U.S. 3 Month Treasury	4.426%	+0.015
US6M	U.S. 6 Month Treasury	4.274%	+0.024

The U.S. and China on Monday reached a trade agreement to reduce tariffs, announcing that they will suspend the majority of duties on each other’s goods for 90 days. Under the new agreement trade agreement, “reciprocal” tariffs between both countries will be cut from 125% to 10%. 

While Monday’s news was relatively positive, it is a testament to the “volatile and chaotic nature” by which policy continues to be made in the United States, said Pepperstone’s senior research strategist, Michael Brown, who added that it was “the very thing that has been eroding the credibility of its institutions, and haven value of its assets, in recent weeks.”

It is also unclear if U.S. President Donald Trump’s 10% universal tariffs and trade policy flip-flops will hurt the U.S. economy and corporate sector in the coming months, said OCBC’s managing director of investment strategy, Vasu Menon.

“Aside from his baseline 10% universal tariffs, Trump’s reciprocal tariffs first announced on 2 April (but paused about a week later, on 9 April) are very hefty,” Menon added.

“A significant slowdown in the US economy seems almost certain but a recession remains an uncertainty, although we do not anticipate a US recession at this juncture,” he wrote in a note.

Markets will be closely watching key inflation data on Tuesday, with expectations that the consumer price index for April will remain at a 2.4% rate, according to Dow Jones’ estimates. Core inflation, which excludes food and energy, is likewise anticipated to stay at a 2.8% annual rate, same as the previous month.