Yields decline as uncertainty from US-Iran talks lingers. Treasury yields declined as geopolitical uncertainty stemming from diplomatic talks between the US and Iran drove risk-off sentiment. The 5-year yield closed 5 bps lower at 3.57%, while the 30-year yield closed 4 bps lower at 4.66%. Meanwhile, oil prices fluctuated today, with Brent crude oil rising ~2% to $72.54 per barrel, and later closing at $70.91 as markets digested the US-Iran talks. Equities sold off after rallying over the last two days as optimism from yesterday’s strong Nvidia earnings failed to carry over, with the S&P 500 and NASDAQ closing 0.54% and 1.18% lower, respectively.
US announces plans to maintain high tariffs on China ahead of Trump’s visit to Beijing. President Trump is scheduled to meet with Chinese President Xi in Beijing on March 31, where they are expected to discuss extending the current trade truce. As with many US trade relationships, fresh uncertainty has entered negotiations following the Supreme Court ruling striking down many of Trump’s tariffs. The decision has left China facing the same 15% global tariff imposed on other nations. Economists estimate the average US tariff on Chinese goods to be 24%, though US Trade Representative Jamieson Greer said in a television interview that tariffs on China would remain between 35% and 50%, without providing details. China has said it will take “all necessary measures” if the US imposes new levies. While Beijing could reinstate restrictions on rare earth exports and Washington could tighten controls on advanced computer chips, both sides have so far avoided escalation.
Fed’s Goolsbee, Miran speak on potential rate cuts this year. Chicago Fed President Austan Goolsbee emphasized that policy rates could be cut further this year if data shows inflation heading toward the Fed’s 2% target. Goolsbee said, “As long as we’re seeing the progress on inflation that people are forecasting, I have some confidence rates can come down several more times this year.” Goolsbee clarified that he does not want to front-load the rate cuts as he needs to see the evidence first. Meanwhile, Fed Governor Stephen Miran continued his push for additional rate cuts, saying, “Four cuts, I think are appropriate, and I’d rather get them sooner than later.”