U.S. bond yields fell on Thursday on temporary hopes for less-than-expected U.S. tariff cuts and the possibility of the first interest rate cut by the Fed in June.
The decline in yields, which move inversely with bond prices, supported price movements in the bond market on Wednesday, which were influenced by signals from U.S. President Donald Trump that he is open to reducing tariffs on China. Trump also backed off his attacks on Federal Reserve Chairman Jerome Powell, bringing some relief to the bond market.
The yields on the benchmark 10-year bonds had reached 4.33%, which is about 5 basis points lower than Wednesday, while the yields on 2-year bonds were about 6 basis points lower at 3.807%.
Later on Thursday, the U.S. Treasury will sell 7-year bonds worth $44 billion, which is the last debt issuance for this week. The auction for 2-year bonds on Tuesday was weak, while the 5-year bond sale saw good demand on Wednesday.