10-year Treasury yield dips back under 1.7% amid global growth fears, tepid inflation

The yield on the benchmark 10-year Treasury note held steady just above 1.7% Friday as fresh concerns about an economic slowdown, a protracted trade dispute between the world's two largest economies and a muted inflation print fueled investor appetite for U.S. Treasurys.

At around 2:02 p.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, rose to about 1.717%, while the yield on the 30-year Treasury bond was down slightly at around 2.223%. The 10-year dipped below 1.7% earlier in the session.

Overnight, Bloomberg reported that the U.S. is holding off on giving permission to U.S. companies to use Huawei products, citing people familiar with the matter.

It comes after China decided to stop buying American crops and after the U.S. officially declared China a currency manipulator earlier this week. The latest flare-up in U.S.-China trade tensions has triggered fresh interest for so-called "safe-haven" assets. U.S. government bond yields slumped over the last week following President Donald Trump's announcement that he would impose new tariffs on an additional $300 billion of Chinese goods.

Earlier this week, the 10-year Treasury yield, which is used as a benchmark for mortgage and auto loan rates, fell to a fresh three-year low as investors continued to rush for safety.The 30-year Treasury bond rate also neared an all-time low on Wednesday.

At times of market turbulence, investors tend to flee to assets expected to either retain or increase in value — such as gold, the Japanese yen and government bonds.

The government reported on Friday that producer prices increased at a sluggish pace on July. The Labor Department said its producer price index rose 0.2% last month after inching just 0.1% higher in June. Excluding volatile food and energy components, producer prices fell 0.1% in July, the first such decline since October 2015.

The Fed has a 2% inflation target, but favors the core personal consumption expenditures (PCE) price index as an inflation gauge. The core PCE price index increased 1.6% on a year-on-year basis in June and has undershot its target this year.