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Treasury yields jump on report US thinking about easing tariffs on China during negotiations

U.S. government debt yields rose on Thursday amid news the U.S. could lower tariffs on Chinese goods as both countries continue negotiation on the trade front.

The yield on the benchmark 10-year Treasury note broke above 2.75 percent to its high of the day on the report. The 2-year yield also hit 2.57 percent before slipping back to 2.55 percent. 

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters

That idea was floated by Treasury Secretary Steven Mnuchin, according to a Wall Street Journal report, which cited people close to the matter.. The report, however, added that Mnuchin faced push-back from U.S. Trade Representative Robert Lighthizer, who thinks any concession could be seen as a sign of weakness.

However, a Treasury Department spokesperson working with the trade team told CNBC: "Neither Secretary Mnuchin nor Ambassador Lighthizer have made any recommendations to anyone with respect to tariffs or other parts of the negotiation with China. This an ongoing process with the Chinese that is nowhere near completion."

Back in December, China and the U.S. agreed to stop slapping tariffs on each other's goods for 90 days while they tried to strike a deal on trade. Recent data has shown signs of weakness in China's economy.