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Yield Curve Gets Squashed Again With Tariff Deadline Approaching

  • Gap between 2-, 10-year Treasury yields narrows yet again
  • BofA’s Cabana sees flattener as way to play trade war
Bloomberg business news
Trump to Pull Tariff Trigger at Midnight Friday
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The midnight deadline for U.S. tariffs on China is offering traders another excuse to steamroll the Treasuries yield curve.

The gap between 2- and 10-year Treasury yields sank under 28 basis points Thursday, the smallest since 2007. The flattening gained momentum heading into the afternoon release of minutes from last month’s Federal Reserve meeting, which reaffirmed support for the central bank’s plan to hike rates gradually and included an exchange on the risks to growth from a deepening trade dispute.