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Yields on 10-year benchmark US government bonds rose as much as four basis points to 4.04%, the highest in more than a week, after negotiators from the world's two biggest economies said they'd struck a series of agreements on issues.
After an apparent truce, the US and China are back to making tit-for-tat trade swipes. Market participants are fretting more about the potential impact on growth than how the protectionist measures will affect inflation.
The president said Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick "will be sending letters out essentially telling people" what "they'll be paying to do business in the United States."
The slowdown reflected a decline in energy costs, used vehicles, and airfares. Motor vehicle insurance — a main source of inflation in recent years — also retreated.
Though details of a potential pact with China aren't clear, bankers are hoping it could convince leery customers to finally go through with delayed investments.
Many business customers are putting off expansion because they can’t find enough workers to fill available jobs.
So far farm loans are holding up well, but bankers gathered at an industry conference this week said they are growing increasingly concerned that credit quality will weaken if the U.S. and China don’t reach a deal soon.
If President Trump’s tariffs on steel and other products stay in place long, big U.S. importers would be hurt and pass on the pain to their midsize and small-business suppliers — which are the bread and butter of commercial lending.
