U.S. government debt yields fell Thursday after President Donald Trump sparked fears of a trade war after announcing tariffs on steel and aluminum.
The yield on the benchmark 10-year Treasury note was lower at around 2.813 percent at 4:19 p.m. ET, while the yield on the 30-year Treasury bond was down at 3.094 percent. Bond yields move inversely to prices.
The United States will slap new tariffs on steel and aluminum as early as next week, President Donald Trump said Thursday.
"People have no idea how badly our country has been treated by other countries. By people representing us who didn't have a clue," Trump said, arguing that trade trends "destroyed" American steel and aluminum industries.
The commander in chief made the announcement surrounded by steel and aluminum executives, who approve of the taxes. The move quickly sparked a broad equity sell-off as fears of international retaliation in the form of taxes on U.S. goods peaked, which could potentially stunt economic growth.
The Senate Banking committee heard from Powell on the Semi-Annual Monetary Policy Report to the Congress. He commented on interest rates hikes in light of more robust economic and inflationary data, saying he does not yet see wage acceleration.
"We don't see any strong evidence yet of a decisive move up in wages," Powell told the collection of senators. "We see wages, by a couple measures, trending up a little bit, but most of them continuing to grow at about two and a half percent. Nothing in that suggests to me that wage inflation is at a point of acceleration."
The bank has projected three hikes in 2018.
Treasury yields rose sharply following his testimony before the House Financial Services committee on Tuesday, sending the Dow Jones industrial average tumbling roughly 300 points as fears of higher borrowing costs weighed on investor sentiment. While concerns over higher interest rates continue to put markets on edge, economic data will also be keeping investors busy Thursday.